Which of the following is an assumption of the basic EOQ model?
A) Lead time is known and constant.
B) Demand may be seasonal.
C) Orders can arrive in partial shipments.
D) Quantity discounts are considered.
E) Lost sales are allowed, but not back orders.

Question

Quizplus · Accepted Answer

The basic EOQ model assumes that lead time is known and constant. This means that the time it takes to receive inventory after an order is placed is consistent and can be predicted accurately. The assumption also implies that there is no variability or uncertainty associated with lead time.

Which of the Following Is an Assumption of the Basic