The optimal order quantity and the optimal inventory level increase as the cost of carrying a unit in inventory increases.

Name: The optimal order quantity and the optimal inventory level increase as the cost of carrying a unit in inventory increases.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The optimal order quantity actually decreases as the cost of carrying a unit in inventory increases, because higher carrying costs make it more expensive to hold inventory, encouraging smaller, more frequent orders to minimize these costs.

The Optimal Order Quantity and the Optimal Inventory Level Increase