What will be the effect on total ordering costs (calculated over multiple orders)in an inventory system as the size of each order increases?
A)It will increase
B)It will decrease
C)It will remain unchanged
D)Order size has no effect on ordering costs.

Question

Quizplus · Accepted Answer

As the size of each order increases, the total number of orders needed over a period decreases, leading to a decrease in total ordering costs. This is because ordering costs are typically incurred each time an order is placed, regardless of the size of the order.

What Will Be the Effect on Total Ordering Costs (Calculated