If the order quantity is increased the annual cost of carrying inventory will:
A) increase
B) decrease
C) remain the same
D) not be affected
E) none of the above

Question

Quizplus · Accepted Answer

When the order quantity is increased, the inventory level also increases, which in turn increases the cost of carrying inventory. Therefore, the annual cost of carrying inventory will increase.

If the Order Quantity Is Increased the Annual Cost of Carrying