Which of these statements is NOT required in order for the EOQ model to be a reasonable​ approach?

a.
No constraints are placed on the size of each lot

b.
The demand rate is known and constant

c.
The​ setup/ordering cost must exceed the annual holding cost of one unit

d.
The lead time is known and constant

Respuesta :

The EOQ model must be more expensive than the annual holding cost of one unit of these assertions, although this is not necessary for it to be a sensible strategy.

The economic order quantity is the ideal order quantity that a company should place to minimize its inventory expenditures, including holding costs, shortage costs, and order fees. To use EOQ, inventory management, or the control of ordering, storing, and using a company's inventory, is necessary. In order to reduce the overall cost of its stock, inventory management is tasked with determining how many units a company should add to its stock with each batch order. The goal of the EOQ model is to guarantee that the right amount of inventory is ordered per batch so that a business does not need to place orders too frequently or have an excess of inventory on hand. 

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