The Economic Order Quantity (EOQ)formula assumes that all input data are known with certainty.

Question

Quizplus · Accepted Answer

The EOQ formula assumes that all input data such as demand, ordering cost, holding cost, and lead time are known with certainty. It is based on the assumption that demand is constant and that there are no stockouts or disruptions in the supply chain. However, in reality, demand and supply chain disruptions may be uncertain, which can affect the accuracy of the EOQ model.

The Economic Order Quantity (EOQ)formula Assumes That All Input Data