Foodservice Dietetic Internship Practice Exam

Which items are best suited for EOQ due to predictable demand?

Items with fluctuating demand Items with sporadic demand Items with steady demand Items with no demand

Correct Answer:

Items with steady demand

Explanation:

EOQ works best when demand is steady and predictable, because it relies on knowing exactly how much will be used over a period and balancing two fixed costs: the cost of ordering and the cost of holding inventory. When demand is stable, you can set a consistent order size that minimizes total costs using the standard EOQ logic, minimizing frequent orders (which raise ordering costs) and large inventories (which raise holding costs). If demand fluctuates or is sporadic, the model’s assumptions break down, making stockouts or excess inventory more likely unless you add safety stock or switch to a different inventory policy. If there’s no demand at all, there’s nothing to order.

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