In the simple EOQ model, if annual demand were to increase, the EOQ would increase proportionately.

Name: In the simple EOQ model, if annual demand were to increase, the EOQ would increase proportionately.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

In the simple EOQ model, if annual demand were to increase, the EOQ would actually increase as the square root of the demand increase. This is because as demand increases, the inventory holding cost increases, but the ordering cost decreases, resulting in a new optimal order quantity.

In the Simple EOQ Model, If Annual Demand Were to Increase