Assumptions of the EOQ model include:
A) Demand is normally distributed.
B) Lead time is normally distributed.
C) There is instantaneous order receipt.
D) Backorders can occur.

Question

Quizplus · Accepted Answer

The EOQ model assumes that there is instantaneous order receipt, meaning that the items are delivered as soon as they are ordered. This assumption allows for a constant replenishment of inventory and simplifies the model. The other assumptions listed (demand being normally distributed, lead time being normally distributed, and the possibility of backorders) may not be true in all cases, and adjustments may need to be made to the model accordingly.

Assumptions of the EOQ Model Include