Question

Which one of the following is not an assumption of the EOQ model? Decisions for one item can be made independently of decisions made for other items. There is no uncertainty in lead-time The amount of an order received is exactly equal to what was ordered, without any "short shipments" from a supplier or scrap losses in the shop Quantity discounts can be taken advantage of for large lot sizes.

Answer 1

Answer:

Quantity discounts can be taken advantage of for large lot sizes.

Explanation:

The EOQ model assumptions:

the order of one item does not intervene with the other.

The order will arrive without delay and with a specific amount of goods.

no losses or damage in transit

The EOQ does not consider the discount for large lot size, their formula does not consider the value of the goods:

$Q_{opt} = \sqrt{\frac{2DS}{H}}$

Its use: Demand of the good

cost of Setup, or ordering cost.

and Holding cost, the cost of keeping the inventory

There is no variable to account for discounts for order size in this method