The economic ordering quantity will rise due to an increase in which of the following variable(s)?
A) Product demand (sales).
B) Carrying costs.
C) Ordering costs.
D) Both a and b above.
E) Both a and c above.

Question

Quizplus · Accepted Answer

An increase in product demand (sales) will increase the EOQ because more inventory will be needed to meet the demand. An increase in ordering costs will also increase EOQ because it becomes less expensive to order larger quantities less frequently, thus reducing the frequency of ordering costs.

The Economic Ordering Quantity Will Rise Due to an Increase