A product whose EOQ is 400 experiences a 50% increase in demand. The new EOQ is
A) unchanged
B) increased by less than 50%
C) increased by 50%
D) increased by more than 50%
E) cannot be determined

Question

Quizplus · Accepted Answer

The Economic Order Quantity (EOQ) formula includes the square root of the demand in its calculation. Therefore, if demand increases by 50%, the EOQ will increase, but by less than 50% because the increase is under a square root.

A Product Whose EOQ Is 400 Experiences a 50% Increase