Fixed-Order-Quantity Model

Fixed-Order-Quantity Model

EOQ is an example of the fixed-order-quantity model since the same quantity is ordered every time an order is placed. A firm might also use a fixed-order quantity when it is captive to packaging situations. If you were to walk into an office supply store and ask to buy 22 paper clips, chances are you would walk out with 100 paper clips. You were captive to the packaging requirements of paper clips, i.e., they come

100 to a box and you cannot purchase a partial box. It works the same way for other purchasing situations. A supplier may package their goods in certain quantities so that their customers must buy that quantity or a multiple of that quantity.