One of the assumptions of the EPQ model is that:
A)The demand varies throughout the year.
B)Shortages are allowed.
C)Quantity discounts vary over time.
D)The quantity ordered is produced incrementally.

Question

Quizplus · Accepted Answer

The EPQ model assumes that the quantity ordered is produced incrementally, meaning that the production process is divided into equal parts, and the ordered quantity is produced in batches. This assumption allows for the calculation of lot size and optimal ordering point to minimize inventory costs. The other options are not assumptions of the EPQ model.

One of the Assumptions of the EPQ Model Is That