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while calculating eoq with & without discount, we assume the same level of inventory purchase, however in reality discount requires larger quanitity to be purchased….. my question why we take the same level of units for calculating both EOQ with & without discount in order to arrive the optimal level of inventory purchase? can anybody help…
I understand you point, but we assume that the level of discount depends on the quantity ordered each time – not on the total quantity ordered over the whole year.
The total ordered for the year stays the same – it is just the quantity ordered each time that changes.
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