| Summary: | 碩士 === 東吳大學 === 會計學系 === 94 === Decision making which determines the prospect and the success of the enterprises and organizations is the work business managers and administrators often do. Decision science is the subject matter which is used to solve problems related to decision making, to conduct researches by scientific methods and procedures, and to propose an efficient package. It can be applied in an array of different fields covering all walks of life and exert a strong influence on enterprises. The success of the
enterprise depends heavily on the correct or not of decision.
On account of the advent of the era of micro-profit, the pricing policies of the enterprise are not based on the cost of the enterprise itself or on profit targets but on the situation of market supplies and needs. For this reason, enterprises know how to get more accurate cost information to make correct decision and to avoid unnecessary cost expenditure.
Economic Order Quantity (EOQ) in the past used continuous compounding to process the inferences often because we took into account of the convenience of Model Inference and could readily get the optimal value. However, there is a gap between continuous compounding and the actual way to effective interest calculations. Hence, this research will construct an EOQ model of discrete compound discount, In addition, we process the numerical example and sensitivity analysis in these research to compare these two models of EOQ.
Significant conclusion can be brief described as follow::
1. We made use of Mathematic Forms to prove that present value of ordinary annuity of continuous compounding is smaller than present value of ordinary annuity of discrete compounding, that the relevant total cost of inventory system with discounted is smaller than that of inventory Systems without discounted under any policy of ordering, and that the relevant total cost of continuous compound discount is smaller than that of discrete compound discount under
any policy of ordering.
2. According to our numerical example, relevant total cost of the EOQ model of continuous compounding is smaller than that of the discrete compounding.
3. Based on the numerical example, we found that when the discount rate is high, the difference percentage between the relevant total of the EOQ model of
continuous compounding and that of discrete compounding increases.
4. When the fixed ordering cost is high, the difference percentage between the relevant total of the EOQ model of continuous compounding and that of discrete compounding decreases.
On the whole, the EOQ model of discrete compounding can provide us both accurate and practical decision-making information. Enterprises, when using more accurate information, can lower the cost caused by wrong decision-making and increase its competitiveness. What is more, due to the rapid progress in computer technology, the functions of math software are so powerful that we, by the use of discrete compounding, can still get information with a short time and with low cost.
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