Which of the following is not an assumption of the EOQ model?
A) demand rate is known and constant
B) shortages are allowed
C) lead time is constant
D) order quantity is received all at once

Question

Which of the following is not an assumption of the EOQ model? 
A) demand rate is known and constant
B) shortages are allowed
C) lead time is constant
D) order quantity is received all at once

Quizplus · Accepted Answer

The EOQ model assumes that demand rate is known and constant, lead time is constant, and the order quantity is received all at once. However, the model does not assume that shortages are allowed. In fact, the model assumes that no shortages are allowed, and that stockouts are not acceptable.

Which of the Following Is Not an Assumption of the EOQ