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

Question

Quizplus · Accepted Answer

All the statements A, B, C, and D correctly describe the behavior of the Economic Order Quantity (EOQ) model in response to changes in its parameters. Doubling ordering costs or annual demand increases the EOQ, while an increase in carrying costs decreases it. Doubling annual demand also increases the number of orders per year.

Which of the Following Statements About the Basic EOQ Model