1. Replenishment is instantaneous (Q). There is no lead time. Lead time is the time taken between ordering and delivery.
2. No safety stock.
3. Demand is known in advance and it is constant.
4. Purchasing cost and cost per order are constant i.e. there are affected by factors like discount.
5. Stock is replaced in equal batches.
6. Cost per order is constant irrespective of quality.
7. Stock holding / carrying cost is a function of average inventory.
8. No stock out cost.
Wilfykil answered the question on April 17, 2019 at 07:13
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