Which of the following statements about the basic EOQ model is false?
A) If the setup cost were to decrease, the EOQ would fall.
B) If annual demand were to double, the number of orders per year would increase.
C) If the ordering cost were to increase, the EOQ would rise.
D) If annual demand were to double, the EOQ would also double.
E) All of the above statements are true.

Question

Quizplus · Accepted Answer

If annual demand were to double, the EOQ would not necessarily double. The EOQ is influenced by various factors such as setup cost, ordering cost, and carrying cost in addition to the annual demand. Therefore, it is possible that the EOQ could increase by less than double or even decrease depending on the changes in these other factors.

Which of the Following Statements About the Basic EOQ Model