Economic Order Quantity (EOQ)increases with an increase in ____.
A)carrying cost per unit
B)fixed cost per order
C)annual demand
D)Both b & c
E)All of the above

Question

Quizplus · Accepted Answer

EOQ increases with an increase in fixed cost per order (as it becomes more expensive to place an order) and with an increase in annual demand (as more units need to be ordered to meet the demand). However, EOQ decreases with a decrease in carrying cost per unit, as it becomes cheaper to hold inventory for longer periods of time. So options A and E are incorrect. Option B is only partially correct.

Economic Order Quantity (EOQ)increases with an Increase in ____