How many orders per year are made under the EOQ for the taxidermist scenario?

How many orders per year are made under the EOQ for the taxidermist scenario?

• A. 0.5 orders per year
• B. 1 order per year
• C. 2 orders per year
• D. 4 orders per year

Answer: (B)

In EOQ, the number of orders you place each year is determined by how many times you need to replenish the inventory to meet annual demand. Specifically, the annual number of orders is N = D / Q*, where D is the total demand per year and Q* is the economic order quantity that minimizes total annual costs. If the EOQ Q* comes out equal to the total annual demand D, then N = D / Q* = D / D = 1. That means you place just one order each year to cover all of the year’s demand. So, for the taxidermist scenario, the EOQ calculation yields a single order per year. If you ever see a different number of orders per year, it would imply Q* is a different size relative to D (more orders if Q* < D, or fewer if Q* > D).

In EOQ, the number of orders you place each year is determined by how many times you need to replenish the inventory to meet annual demand. Specifically, the annual number of orders is N = D / Q*, where D is the total demand per year and Q* is the economic order quantity that minimizes total annual costs.

If the EOQ Q* comes out equal to the total annual demand D, then N = D / Q* = D / D = 1. That means you place just one order each year to cover all of the year’s demand.

So, for the taxidermist scenario, the EOQ calculation yields a single order per year. If you ever see a different number of orders per year, it would imply Q* is a different size relative to D (more orders if Q* < D, or fewer if Q* > D).