Which of the following is not an assumption of the economic order quantity model shown below? Q? = $\sqrt { \frac { 2 \cdot D \cdot S } { H } }$
A) Demand is known, constant, and independent.
B) Lead time is known and constant.
C) Quantity discounts are not possible.
D) Production and use can occur simultaneously.
E) The only variable costs are setup cost and holding (or carrying) cost.

Question

Quizplus · Accepted Answer

The Economic Order Quantity (EOQ) model assumes that all demand is met immediately when an order is received, implying that production and use cannot occur simultaneously. This is because the EOQ model is designed for inventory management and assumes instantaneous replenishment, which contradicts the idea of simultaneous production and use.

Which of the Following Is Not an Assumption of the Economic