Question: The simple economic order quantity (EOQ) model shows how much to order (i.e., lot size) in terms of holding costs, setup (ordering) costs, and total

The simple economic order quantity (EOQ) model shows how much to order (i.e., lot size) in terms of holding costs, setup (ordering) costs, and total inventory cost. In terms of this model, why is it necessary to reduce setup cost if we desire smaller lot sizes? Draw the inventory cost curves diagram and fully explain.

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