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

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 results in a higher EOQ to minimize total inventory costs.

Which One of the Following Statements Concerning the Economic Order