Discuss the assumptions of the economic order quantity (EOQ) model and its objective
1 . Demand for the product is constant and known with certainty.
2 . The lead time is known and constant.
3 . All inventories in the order arrive at the same time.
4 . The total cost per year of placing orders is a variable that decreases as quantities ordered increases.
5 . The total cost per year of holding inventories (carrying costs) is a variable that increases as the quantities ordered increase.
6 . There are no quantity discounts.
The objective of the EOQ model is to reduce total inventory costs.
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