Which one of the following statements concerning the economic order quantity (EOQ)is TRUE?
A) The EOQ is the order quantity that minimizes annual inventory holding costs.
B) An increase in demand will increase the EOQ value.
C) The time between orders
D) The EOQ formula assumes that there are only three relevant costs: holding, transportation, and setup.

Question

Quizplus · Accepted Answer

An increase in demand will increase the EOQ value because the EOQ formula includes demand as a factor, and higher demand leads to a larger optimal order quantity to minimize total costs.

Which One of the Following Statements Concerning the Economic Order