Hi Sir
Please I need to understand this....
A company determine its order quantity using the EOQ formula.
what would be the effect of the EOQ and the total and the total annual order cost of and increase in the holding cost per unit?
A higher higher
B lower higher
C higher lower
D lower lower
Ask the Tutor ACCA MA
holding cost
12y ago#1If holding cost increases, the Ch increases and if you look at the formula is means that the EOQ will be lower.
If the EOQ is lower it will mean more orders a year, and so the total annual order cost will be higher.
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