The difference between the basic EOQ model and the production order quantity model is that

A. the EOQ model does not require the assumption of known, constant lead time.

B. there are no holding costs in the production order quantity model.

C. the production order quantity model does not require the assumption of instantaneous delivery.

D. the production order quantity model does not require the assumption of known, constant demand.

Question

Rachel Reese

Business

15 December, 18:57

The difference between the basic EOQ model and the production order quantity model is that

A. the EOQ model does not require the assumption of known, constant lead time.

B. there are no holding costs in the production order quantity model.

C. the production order quantity model does not require the assumption of instantaneous delivery.

D. the production order quantity model does not require the assumption of known, constant demand.

+2

Answers (1)

Know the Answer?

Allisson Chung · Answer 1

C. the production order quantity model does not require the assumption of instantaneous delivery.

Explanation:

EOQ refers to Economic Order Quantity method, this method particularly aims at 0 extra inventory in hand and keeping the total inventory in hand which is needed and then there is n assumption that the goods shall be delivered instantly.

Under the production order quantity model the model is made to calculate the quantity to be ordered for meeting the demand of production units.

This aims at the minimum order quantity to be delivered to meet the production needs.