In a fixed-order-quantity system, when demand is uncertain, using economic order quantity (EOQ) based only on the average demand

Question

kipiarov [429]

2 years ago

8

In a fixed-order-quantity system, when demand is uncertain, using economic order quantity (EOQ) based only on the average demand

will result in a low probability of a stockout. a. True b. False

Mathematics

1 answer:

Ganezh [65] · Answer 1 · 2022-04-19T03:13:20+03:00

Ganezh [65]2 years ago

8 0

Answer:

b. False

Step-by-step explanation:

In a fixed-order-quantity system, when there is uncertainty in demand, the average demand will lead to a high probability of a stockout which is in contrast to what is stated in the question. Thus, the answer is false.