Question

If, in a given scenario, the EOQ is 100, then the average amount of cycle stock will be...?

a) 0
b) 50
c) 100
d) 200

Answer 1

The average amount of cycle stock would be 100 units.

The average amount of cycle stock can be calculated using the Economic Order Quantity (EOQ) formula. The EOQ formula is given by:

EOQ = sqrt((2 * Demand * Setup cost) / Holding cost per unit)

In this scenario, the EOQ is given as 100. Therefore, the average amount of cycle stock would be 100 units.