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Agree with expert answer
and sorry i'm not expert on this filed
EOQ formula works under ideal scenario i.e no fluctuation in demand & lead time, there is no discount for bulk purchase,
But such scenario does not exist in practical work hence EOQ needs improvisation to work.
The EOQ is derived by optimize the total cost function.
The EOQ works if its four assumptions match the case it is used on. The assumptions are: A. Annual demand, carrying costs and ordering costs can be estimated. B. Inventory level is divided by 2, no safety stock, goods used uniformly and are gone by next order. C. Stockout, customer responsivenss and other costs not considered. D. No quantity discounts.
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