Certified Management Accountant 2025 – 400 Free Practice Questions to Pass the Exam

One of the key assumptions of the Economic Order Quantity (EOQ) model is that demand is uniform. This means that the model operates under the premise that the demand for inventory remains constant over time. This consistency allows for easier calculations of how much inventory should be ordered at a time to minimize total inventory costs, which include holding costs and ordering costs.

By assuming uniform demand, the EOQ model can effectively determine the optimal order quantity that minimizes these costs while meeting the needs of the business. If demand were to vary significantly, the calculations would become more complex and might lead to inefficiencies in inventory management, ultimately undermining the purpose of the EOQ model.

The other options involve assumptions that contradict the principles of the EOQ model. For example, highly variable supply would introduce uncertainty into inventory management, rather than allowing the model to function optimally. Similarly, unpredictable replenishment and irregular ordering costs would also complicate the simplicity and effectiveness of the EOQ formula, which relies on stable cost conditions.