ABC Company in southwest UK manufactures leather lacing and kits. It consists of 5 Leather Factory stores of, which three are located in the UK and others are located in Europe. Recently the overall demand for its products has declined. Therefore, intermediate-term attempts to control costs have centered on forecasting demand and reducing inventory costs. To help ABC Company better manage its resources and more effectively respond to demand, management team is considering ways to improve its planning process by finding demand/inventory management methods that can reasonably predict demand six to eight weeks into the future, and establishing procedures for managing inventory costs.

• If ABC Company is considering using Economic Order Quantity (EOQ) to manage its inventory costs, answer the following question:

• What are the assumptions of the basic EOQ model, and to what extent do they limit the usefulness of the model?

Could the answer please be presented in report style, the question is worth 15% of a level 6 report with around 300-400 words maximum. Please do not simply copy and paste from google or a negative review will follow. Positive review will be received for quality answers, thanks in advance