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The purchasing agent for a company that assembles and sells air-conditioning eqpt in US has noted that the cost of compressors has increased significantly each time they have reordered. The company uses EOQ model to determine order size. What are the implications of this price escalation with respect to order size? What factors other than price must be taken into consideration?

The purchasing agent for a company that assembles and sells air-conditioning eqpt in US has noted that the cost of compressors has increased significantly each time they have reordered. The company uses EOQ model to determine order size. What are the implications of this price escalation with respect to order size? What factors other than price must be taken into consideration?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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The purchasing agent for a company that assembles and sells air-conditioning eqpt in US has noted that the cost of compressors has increased significantly each time they have reordered. The company uses EOQ model to determine order size. What are the implications of this price escalation with respect to order size? What factors other than price must be taken into consideration?

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