Which of the Following Is NOT an Assumption of the Classic

question 5

Multiple Choice

Which of the following is NOT an assumption of the classic Economic Order Quantity (EOQ) ?

• A) Lead time is known and constant.
• B) Demand is known and constant.
• C) Instantaneous replenishment.
• D) There is no quantity discount.
• E) The production rate must be greater than the consumption rate.

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Definitions:

Normal Balance

The side (debit or credit) of an account that is typically increased, reflecting a fundamental principle in accounting.

Liability

A company's legal financial debts or obligations that arise during the course of business operations.

Prepaid Insurance

Payments made in advance for insurance coverages, recognized as assets until the coverage period lapses and it then becomes an expense.

Fiscal Year

A one-year period that companies use for accounting and financial reporting purposes, which may or may not coincide with the calendar year.