In EOQ model, the average inventory is defined as the order quantity divided by 2.

Name: In EOQ model, the average inventory is defined as the order quantity divided by 2.
Brand: Quizplus
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Quizplus · Accepted Answer

In the EOQ (Economic Order Quantity) model, the average inventory is assumed to be half of the order quantity. This is because under the assumption of constant demand and no replenishment during lead time, the inventory level drops from the order quantity to zero, resulting in an average inventory that is half of the order quantity.

In EOQ Model, the Average Inventory Is Defined as the Order