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) If the carrying cost were to increase, the EOQ would fall.

Question

Quizplus · Accepted Answer

If the annual demand were to double, the EOQ would not necessarily double. The EOQ would increase, but not necessarily by double. The formula for EOQ is based on a square root, which means that the change in demand will have a less than proportional effect on the EOQ.

Which of the Following Statements About the Basic EOQ Model