Economic Production Quantity - Assumptions

Assumptions

  1. Demand for items from inventory is continuous and at a constant rate
  2. Production runs to replenish inventory are made at regular intervals
  3. During a production run, the production of items is continuous and at a constant rate
  4. Production set-up/ordering cost is fixed (independent of quantity produced)
  5. The lead time is fixed
  6. The purchase price of the item is constant i.e. no discount is available
  7. The replenishment is made incrementally

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