Memory must be allocated in contiguous memory blocks large enough to hold the entire program (or at least each entire segment - code, data, etc.)

Internal and external memory fragmentation can result. Each of these represents unused memory which limits the number and/or size of simultaneous processes.

Memory allocation algorithms that split off the exact memory request size from free blocks can eliminate internal fragmentation.

However, these algorithms (first fit, best fit, worst fit) all suffer from external fragmentation.