Which of the following is NOT an EOQ assumption?

• A. Constant demand
• B. Fixed order cost
• C. Instantaneous replenishment
• D. Stockouts are allowed

Answer: (D)

The situation tests the no-shortages condition that underpins the classic EOQ model. In the traditional EOQ setup, demand is constant and known, the cost to place each order is fixed, and replenishment arrives instantly with no lead time. A key consequence of these assumptions is that shortages are not allowed; you must have inventory on hand or already on the way to meet demand. So saying stockouts are allowed would violate the EOQ framework, which is why that statement is not an EOQ assumption. The other statements—constant demand, fixed order cost, and instantaneous replenishment—are all consistent with the model and part of what makes it possible to calculate the optimal order quantity.