Which of the following is not an assumption of the basic fixed-order quantity inventory model?
A)Ordering or setup costs are constant
B)Inventory holding cost is based on average inventory
C)Diminishing returns to scale of holding inventory
D)Lead time is constant
E)Demand for the product is uniform throughout the period

Question

Quizplus · Accepted Answer

The basic fixed-order quantity inventory model assumes that ordering or setup costs are constant, inventory holding cost is based on average inventory, lead time is constant, and demand for the product is uniform throughout the period. However, it does not assume diminishing returns to scale of holding inventory.

Which of the Following Is Not an Assumption of the Basic