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kramer
3 years ago
10

When using the simple EOQ model to determine optimal order quantity, which of the following is true?

Business
1 answer:
Morgarella [4.7K]3 years ago
3 0

Answer:

C. Order quantity increases as holding cost per unit per year decreases

Explanation:

the formula for calculating economic order quantity (EOQ) is:

EOQ = √(2SD/H)

  • S = cost per order
  • D = annual demand
  • H = holding cost per unit

If holding cost per unit (H) decreases, the EOQ will increase. Whenever you are dividing, if the denominator decreases, the result will be larger.

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