Willie Manufacturing Company increased the size of several inventory order quantities that had previously been determined using the EOQ model.What is the impact on the total amount of annual carrying and ordering costs?
A) increase
B) no change
C) decrease
D) cannot be determined

Question

Quizplus · Accepted Answer

Increasing the order quantities will typically lead to an increase in the total amount of annual carrying and ordering costs because larger quantities will result in higher carrying costs while ordering costs may decrease slightly due to fewer orders being placed.

Willie Manufacturing Company Increased the Size of Several Inventory Order