For the EOQ model, which of the following relationships is incorrect?
A) As the order quantity increases, the number of orders placed annually decreases.
B) As the order quantity increases, annual holding cost increases.
C) As the order quantity increases, annual ordering cost increases.
D) As the order quantity increases, average inventory increases.

Question

Quizplus · Accepted Answer

In the EOQ model, as the order quantity increases, the annual ordering cost actually decreases because fewer orders are placed.

For the EOQ Model, Which of the Following Relationships Is