n the Economic Order Quantity $($EOQ$)$ model, how does the relationship between ordering costs and carrying costs influence the decision to order larger or smaller quantities of inventory?

In the Economic Order Quantity $($EOQ$)$ model, how does the relationship between ordering costs and carrying costs influence the decision to order larger or smaller quantities of inventory?

Both ordering and carrying costs remain constant regardless of the order quantity, so EOQ focuses solely on minimizing the number of orders placed.

Larger order quantities increase both ordering and carrying costs simultaneously, leading to higher total costs.

Smaller order quantities minimize carrying costs but increase ordering costs, while larger order quantities decrease ordering costs but increase carrying costs.

Increasing order quantity decreases both ordering and carrying costs, leading to an overall reduction in total costs.