Which of the following statements with regard to the economic production quantity (EPQ)model is FALSE?
A)It was developed in 1918.
B)The EOQ model is based on the EPQ model.
C)It assumes that the company will produce the items.
D)It assumes that lead time is known and is constant.

Question

Quizplus · Accepted Answer

The EPQ model is actually based on the Economic Order Quantity (EOQ) model, not the other way around. The EOQ model was developed first and the EPQ model was later developed as a modification of the EOQ model to allow for production setups and multiple production batches. The other statements are true: the EPQ model was developed in 1918, it assumes that the company will produce the items, and it assumes that lead time is known and constant.

Which of the Following Statements with Regard to the Economic