It can be seen from the graph of the total cost that the curve becomes nearly fl at around the region
of the EOQ. That is, the change in total cost will not be very signifi cant if the order quantity Q were
to be slightly different from the EOQ. Further, it can be seen that the total cost is not very sensitive to
changes in D, C
o
or C
c
. This is a very useful feature advantageous to the operation of an EOQ system.
Sensitivity analysis of EOQ is carried out at the planning stage, much before the start of the
fi nancial year. As such, the values of C
o
, C
c
, price P and interest I are all determined on the basis of
forecasting. ...
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