The following assumptions are made to develop the model.
(i) The demand rate for an item is represented by a quadratic and
continuous function of time.
(ii) Replenishment occurs instantaneously on ordering i.e.,, lead time
is zero.
(iii) The inventory system involves only single type of item.
(iv) Shortages are allowed and completely backlogged.
(v) No interest is to be charged after commencement of shortages.
(vi) No interest is to be earned after permissible delay periods.
(vii) The planning period is of infinite length.