Reliable Lead Times
Constant Demand Rate
Economical Order Quantity Assumptions
EOQ total order cost is constant.
The total number of units consumed is fixed.
Ordered stock will be delivered at once.
Inventory cost is assumed to be constant.
The maximum quantity for each inventory item is calculated separately.
Although this chapter identified a number of costs associated with inventory determination, his basic EOQ model only considers his two categories: storage costs and ordering costs.
The EOQ model attempts to ensure that the correct amount of inventory is ordered for each batch, so businesses do not have to order frequently and do not carry overstock.
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