What is the EOQ model, and what assumptions does it make about demand, lead time, and costs?

• A. The EOQ model determines optimal order quantity to minimize total inventory costs under constant demand, fixed lead time, and known holding and ordering costs with instantaneous replenishment.
• B. The EOQ model assumes variable demand and uncertain lead times.
• C. The EOQ model minimizes only holding costs.
• D. The EOQ model ignores ordering costs.

Answer: (A)