Reconsider the above problem suppose although we have estimated the demand as 60per week it turns out that it is actually 120 per week (ie we have a 100% forecasting error)
a) if we use the lot size calculated in the above problem what will the setup plus holding cost be under the true demand
b) what would the cost be if we used the optimum lot size
c) what percentage increase in cost was caused by100 percent demand forecasting error?what dose this tell you about the sensitivity EOQ model to errors in the data?