Question:medium

In the Basic Economic Order Quantity (EOQ) model, if the holding cost per unit increases, the EOQ will:

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Remember that variables in the numerator of the EOQ formula (Demand, Ordering Cost) have a direct relationship with EOQ, whereas variables in the denominator (Holding Cost) have an inverse relationship.
Therefore, any increase in holding cost will always decrease the optimal order size.
Updated On: Jul 9, 2026
  • Increase
  • Decrease
  • Remain unaffected
  • Double
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The Correct Option is B

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