Consider the case where a business orders from a supplier using a continuous review (Q) system, and in quantities that are consistent with the Economic Order Quantity (EOQ). How should the following change to a cost parameter or a condition affect their order quantity (assuming that they adjust their order quantities accordingly)?

If the company re-designs their ordering process such that it is less costly (administration-wise) for them to place orders, then the order quantity should __________

a.

increase

b.

not be changed (stay the same)

c.

decrease