Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed

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21.6 Five assumptions made when using the simplest version of the EOQ model are 1

entry trigger points
Location of journal
entry trigger points
1

2

3
2

2

1
1 Purchase of direct (raw) materials
2 Completion of good finished units of product
1 Purchase of direct (raw) materials
2 Sale of good finished units of product
1 Completion of good finished units of product
21.6
Five assumptions made when using the simplest version of the EOQ model are
1
The same fixed quantity is ordered at each reorder point.

Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012
2
Demand, ordering costs, carrying costs and the purchase-order lead time are certain.
3
Purchasing costs per unit are unaffected by the quantity ordered.

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