If a company increases its safety stock, then its EOQ will go up.

Question

Quizplus · Accepted Answer

EOQ (Economic Order Quantity) is the quantity of inventory that should be ordered at one time to minimize the total cost of ordering and holding inventory. Safety stock is the additional inventory maintained to mitigate the risk of stockouts. Increasing safety stock does not affect EOQ, as EOQ is based on the costs of ordering and holding inventory, not on the level of safety stock.

If a Company Increases Its Safety Stock, Then Its EOQ