The EOQ model assumes inventory:
A)is held at a constant level.
B)is sold at a steady rate until it is depleted.
C)will be available just as it is needed for production.
D)has seasonal fluctuations.
E)can be delivered immediately upon order.

Question

Quizplus · Accepted Answer

The EOQ (Economic Order Quantity) model assumes that inventory is sold at a steady rate until it is depleted, which means that the demand for the inventory is constant and steady. This assumption allows for the calculation of the optimal order quantity, reorder point, and inventory holding costs.

Other choices: 
A) The EOQ model assumes that inventory is not held at a constant level, but rather is ordered in batches when the inventory level drops to a certain point (reorder point). 
C) The EOQ model assumes that inventory will be available just as it is needed for production, but this is not the main assumption of the model. 
D) The EOQ model does not assume that inventory has seasonal fluctuations, although this could be taken into account if the demand for the inventory varies seasonally. 
E) The EOQ model assumes that inventory can be ordered and delivered within a certain lead time, but it does not assume that inventory can be delivered immediately upon order.

The EOQ Model Assumes Inventory