In the basic EOQ model,if annual demand doubles what is the effect on the EOQ?
A)It doubles
B)It is four times its previous amount
C)It is half its previous amount
D)It is about 70% of its previous amount
E)It increases by about 40%

Question

In the basic EOQ model,if annual demand doubles what is the effect on the EOQ?
A)It doubles 
B)It is four times its previous amount 
C)It is half its previous amount 
D)It is about 70% of its previous amount 
E)It increases by about 40%

Quizplus · Accepted Answer

The EOQ formula includes the square root of annual demand, so if the annual demand doubles, the square root of that demand increases by approximately 1.41. Therefore, the EOQ will increase by approximately 40%.

In the Basic EOQ Model,if Annual Demand Doubles What Is