The EOQ model has a number of assumptions. List them and explain whether they are readily attainable. For example, will the adjustment for quantity discounts easily work?   

Answer:

The correct way of answering such a question can be summarized as follows;

The EOQ MOdel;

The EOQ (Economic Order Quantity) refers to the quantity that minimizes the ordering costs as well as the holding costs /carrying costs of an organization.The total costs according to this model are made of the purchase costs,the ordering costs and the holding costs.

EOQ works under certain assumptions;These are;

• The ordering costs are constant
• The demand rate is known and evenly spread throughout the year.
• There price is known and constant.
• Fixed costs are excluded n the calculation of EOQ.

The assumptions of the EOQ are the same facts that form the constraints or rather the disadvantages of using this mode.

The Just In Time System;

• An inventory strategy whose main objective s to increase efficiency and reduces wastes by receiving goods only when they are required in the production process.The just in time inventory system reduces inventory cost by cutting off the inventory holding costs.