EOQ

This topic has 1 reply, 2 voices, and was last updated 10 years ago by John Moffat.

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November 30, 2015 at 10:45 pm #286572
sayma
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Hello sir
why would both: ttl annual holding cost and EOQ be lower if the ordering cost decreases?
Thank you for always helping out
December 1, 2015 at 6:45 am #286615
John Moffat
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If the order cost decreased, then the top part of the EOQ decreases and therefore the EOQ will decrease.

If the EOQ is lower than the average inventory will be lower, and therefore the total annual holding cost will be lower.
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