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why should you not use the EOQ without additional consideration in real life situations

why should you not use the EOQ without additional consideration in real life situations

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Answer #1

EOQ in real life situation

Economic order quantity is not simple in real life to calculate minimum cost. It requires good understanding of mathematical calculations. EOQ model generally based on simply availability of items to restocked but does not consider any fluctuations which arises in day-to-day running activities.

It is very difficult for the small businesses to hire personal or consultant to maintain the stock at minimum possible cost.

Generally, EOQ is effective only for one product line. It is very difficult to use EOQ model in different product line.

Ordering cost and carrying cost are never constant.

So, applicability of EOQ is not easy as it looks. It is difficult to use EOQ concepts in real life situations. Concept of EOQ is limited but applicability of EOQ in real life requires hard calculations and mathematical skills.

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