Question 26 Assume that the cost to hold inventory for the store decreases, whil

Question

Question 26 Assume that the cost to hold inventory for the store decreases, while all other costs and demand stays the same. Which of the following statements can you say is true about the store's order policy? O They should order the same amount as recommended in the EOQ question above. O In order to minimize their total annual costs they should order less than the order quantity recommended in the EOQ question above. In order to minimize their total annual costs they should order more than the order quantity recommended in the EOQ question above. Unable to determine from the information provided. Honorlork is sharing your screen with ap

Explanation / Answer

Formula for Economic Order Quantity is -(2*DEMAD*COST/ORDER)/Holding Cost

In this formula if holding cost will decrease the EOQ will be increased.

Hence They should order more that the order quantity.

Hence option C is correct.

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