If we assume that inventory is used up at a constant rate and safety stock is zero, the average inventory will be half the re-order size.
Since safety stock = 0, and (EOQ/2) + Safety stock = Average inventory, then we carry one half that amount.

Question

Quizplus · Accepted Answer

This statement is true as per the given assumptions. The average inventory will be equal to half of the re-order size in the absence of safety stock.

If We Assume That Inventory Is Used Up at a Constant