For the EOQ model,which of the following relationships is NOT correct?
A)As the order quantity increases,the number of orders placed annually decreases.
B)As the order quantity increases,annual holding cost increases.
C)As the order quantity increases,annual ordering cost increases.
D)As the order quantity increases,average inventory increases.

Question

Quizplus · Accepted Answer

In the Economic Order Quantity (EOQ) model, as the order quantity increases, the annual ordering cost actually decreases because fewer orders are needed to meet demand. The other statements correctly describe the relationships within the EOQ model.

For the EOQ Model,which of the Following Relationships Is NOT