Could model be modified to fit needs of specific businesses

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Reference no: EM1375158 , Length: 2 Pages

Q. Economic Order Quantity (EOQ) Model Assumptions

Consider subsequent assumptions of EOQ model assumptions:

Ordering cost is constant.

Rate of demand is known and spread evenly throughout year.

Lead time is fixed.

Purchase price of item is constant (i.e., no discount is available).

Replenishment is made instantaneously; whole batch is delivered at once.

Only 1 product is involved.

1. Do you think se assumptions are realistic or are EOQ model an outdated technique for inventory control? If so, why? If not, explain why not?

2. Could model be modified to fit needs of specific businesses?

 

 

Reference no: EM1375158

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