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Define economic order quantity EOQ and show its assumptions

      

Define economic order quantity EOQ and show its assumptions

  

Answers


Ruth
Economic order quantity is the quantity that minimizes total inventory holding costs and ordering costs. It is the oldest classical production scheduling model.

Assumptions of the EOQ
1. That the cost of ordering remains constant
2. That the demand rate for the year is known and evenly spread throughout the year.
3. The lead time is not fluctuating
4. That no cash or settlement discounts are available and purchase price is constant for
every item
5. That the optimal plan is calculated to only one product
6. That there is no delay in the replacement of the stock and the order is delivered in the
quantity that was demanded i.e in whole batch.
NatalieR answered the question on June 13, 2022 at 09:35


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