Consider the following assumptions of the EOQ model assumptions:
The ordering cost is constant.
The rate of demand is known and spread evenly throughout the year.
The lead time is fixed.
The purchase price of the item is constant (i.e., no discount is available).
The replenishment is made instantaneously; the whole batch is delivered at once.
Only one product is involved.
1. Do you think these assumptions are realistic, or is the EOQ model an outdated technique for inventory control? If so, why? If not, why not?
2. Could the model be modified to fit the needs of specific businesses?
Recently Asked Questions
- Please help me breakdown and solve this question for Finance math. Hector and Yolanda want to establish a fund for their grandson's college education. What
- I need to know whether a contract exists or not and why in the scenario below. Tim the Toolman and his assistant Al host a cable television do-it-yourself
- I am conducting a variance study, and my assignment asks the question, "Which inpatient service lines are over budget after accounting for workload