Exam Code: C-BCFIN-2502
Exam Name: SAP Certified Associate - Positioning SAP Business Suite via SAP Financial Management Solutions
Version: V13.25
Q & A: 72 Questions and Answers
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NEW QUESTION: 1
A characteristic of the basic economic order quantity EOQ) model is that it:
A. Is relatively insensitive to error.
B. Should not be used in conjunction with computerized perpetual inventory systems.
C. Is used when product demand, lead-time, and ordering costs are uncertain.
D. Should not be used when carrying costs are large in relation to procurement costs.
Answer: A
Explanation:
The basic EOQ model equals the square root of the quotient of 1) the product of twice the demand times the cost per order, ) divided by the periodic carrying cost. Hence, the model is relatively insensitive to error. A given percentage error in a value results in a lower percentage change in the EOQ.
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