The basic Economic Order Quantity (EOQ) model includes which of the following assumptions?
I. The same fixed quantity is ordered at each reorder poin... Accounting MCQs | Accounting MCQs

The basic Economic Order Quantity (EOQ) model includes which of the following assumptions?
I. The same fixed quantity is ordered at each reorder point.
II. Purchasing costs are unaffected by the quantity ordered.
III. Purchase order lead-time is known with certainty.
IV. Adequate inventory is always maintained to avoid stockouts.

I and IV only.
II and III only.
I, II, and IV only.
I, II, III, and IV.Show Result

Correct - Your answer is correct.

Wrong - Your answer is wrong.

Detailed Answer

Answer (D) is correct. The basic EOQ model assumes that the same fixed quantity is ordered at each reorder point, purchasing costs are unaffected by the quantity ordered, purchase order lead-time is known with certainty, and adequate inventory is always maintained to avoid stockouts.