Question

16. Which of the following is not true for the EOQ model with gradual replenishment?
(A) Demand is constant
(B) Production rate exceeds usage rate
(C) Run size exceeds maximum inventory.
(D) There are no setup costs​

Answer 1

Answer:

option b

Explanation:

Answer 2

Run size exceeds maximum inventory is not true about the EOQ model.

Explanation:

• EOQ model is also referred to as the production lot size or the non-instantaneous gradual model.
• In the economic order quantity model, the rate of consumption and replenishment is not the same.
• Production can consume all the inventory gradually or over a period of time.
• Thus we can say that the replenishment cycle in the model is not good from the vendor point of view.