happens to the EOQ when the unit cost increases (assuming all other variables remain the same)?
A)EOQ increases
B)EOQ decreases
C)EOQ remains the same
D)None of the above (need more information)
Rajesh Indian Market (RIM) is open 12 months out of the year. At RIM, the demand for rice is very consistent 200 pounds per month. RIM orders the rice from a distributor in India at an ordering cost of $50 per order. Rice costs $5 per pound, and annual carrying charge is 15%. Answer question 7-11 based on this information.

Question

Quizplus · Accepted Answer

When the unit cost increases, the EOQ decreases because the carrying cost, which is a percentage of the unit cost, increases, leading to a higher total cost of holding inventory.

Happens to the EOQ When the Unit Cost Increases (Assuming