Practicing Success
Which of the following information is NOT needed to find Economic order Quantity (EOQ)? |
Annual demand Ordering cost Carrying cost Profit margin |
Profit margin |
The correct answer is option (4) - Profit margin. The information that is NOT needed to find Economic Order Quantity (EOQ) is: Profit margin Profit margin is not a factor directly considered in the calculation of Economic Order Quantity (EOQ). EOQ primarily involves annual demand, ordering cost, and carrying cost to determine the optimal order quantity that minimizes the total cost of inventory. The EOQ formula primarily considers three factors: annual demand, ordering cost , and carrying cost. It utilizes these factors to determine the optimal order quantity that minimizes the total cost associated with inventory management. |