Which of the following is true of the EOQ model?Note that the optimal order quantity, Q, will be called EOQ.
A) if the annual sales, in units, increases by 20%, then eoq will increase by 20%.
B) if the average inventory increases by 20%, then the total carrying costs will increase by 20%.
C) if the average inventory increases by 20% the total order costs will increase by 20%.
D) the eoc is the same for all companies.
E) if the fixed per order cost increases by 20%, then eoq will increase by 20%.

Question

Quizplus · Accepted Answer

The EOQ model assumes that carrying costs are directly proportional to the average inventory level, so if the average inventory increases by 20%, the total carrying costs will also increase by 20%.

Which of the Following Is True of the EOQ Model?Note