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Chapter 5
3.4 Economic batch quantity (EBQ)
The EBQ model is primarily concerned with determining the number of items that
should be produced in a batch.
EOQ = 2C o D D
C (1 – )
R
Q = Batch size
D = Demand per annum
C h = Cost of holding one unit for one year
C o = Cost of setting up one batch ready to be produced
R = Annual replenishment rate
Illustrations and further practice
Now try TYU question 8 from Chapter 5
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