All else being equal, for each of the circumstances below what will happen to the calculated...
- All else being equal, for each of the circumstances below what will happen to the calculated EOQ level? (1.5)
- Interest rates rise:
EOQ
goes:
Up
Down No
Change
- A big cost per unit increase EOQ
goes:
Up
Down No
Change
- Retail price and margin increase without any increase in cost basis:
EOQ goes: Up Down No Change
Homework Answers
a. No change
b. Down
c. No change
Explanation: EOQ is a function of demand, order cost and holding cost. Directly proportional to demand and order cost while inversely proportional to holding cost.
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