Answer:
The Economic Order Quantity (EOQ) is developed based on the premise that demand, ordering, and holding costs remain constant. Therefore, if any of these core assumptions shift, this could lead to discrepancies between theory and actual spending, which might explain Ali's situation.
Explanation:
The Economic Order Quantity (EOQ) defines the optimal order size that minimizes the total expenses associated with ordering, receiving, and stocking inventory.
The formula for Economic Order Quantity (EOQ) is: EOQ = sqrt of 2DS/H
where:
D= Demand in units
S= Ordering costs per order
H= Holding cost per unit over time
