Chemical Engineering - Chemical Engineering Basics - Discussion


If the demand for an item is trebled and the order cost is reduced to one third, then the economic order quantity

[A]. is trebled.
[B]. remains unchanged.
[C]. decreases by a factor of 3.
[D]. decreases by a factor of 1/3.

Answer: Option B


No answer description available for this question.

Sushil said: (Nov 11, 2018)  
Economic order quantity (EOQ) is the order quantity that minimizes total inventory costs.

Total inventory cost is comprised of the following main costs:

Cost of purchase.
Order costs.
Holding costs.

If we change the order quantity, it can affect the different types of inventory costs in different ways.

So, on changing demand and order cost, EOQ thus remains unchanged.

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