Discuss the suitability of traditional inventory models for the discount segment of the grocery market

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Accounting

Discuss the suitability of traditional inventory models for thediscount segment of the grocery market

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EOQ Economic Order QuantityContinuous OrderingPeriodic OrderingEOQ Economic Order Quantity method determinesthe optimal order quantity that will minimize the total inventorycost EOQ is a basic model and further models developed based onthis model include production Quantity Model and Quantity DiscountModelContinuous Order Model works on fixed orderquantity basis where a trigger for fixed quantity replenishment isreleased whenever the inventory level reaches predetermined safetylevel and triggers re orderingPeriodic System Model This model works on thebasis of placing order after a fixed period of timeEOQ ModelExample BiotechCo produces chemicals to sell to wholesalersOne of the raw material it buys is sodium nitrate which ispurchased at the rate of 2250 per ton Biotechs forecasts show aestimated requirement of 575000 tons of sodium nitrate for thecoming year The annual total See Answer

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