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What assumptions are associated with the EOQ model?

What assumptions are associated with the EOQ model?

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Answer #1

Eoq model is used to find out optimum quantity of order which will minimize the inventory cost with out hampering to continuous manufacturing process.

I am listing down the assumption associated with the EOQ model

1. Cost of ordering remain constant through out the period.

2. Demand rate through out the year is known and evenly distributed in all the months.

3.The time to complete the whole process remain constant through out the period.

4. Purchase price is same for every item.

5. Optimal plan is done for only one product.

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