Question: You manage inventory as per the Economic Order Quantity (EOQ) model. However, you realize that you incorrectly specified the fixed cost of ordering. In specific,

You manage inventory as per the Economic Order

You manage inventory as per the Economic Order Quantity (EOQ) model. However, you realize that you incorrectly specified the fixed cost of ordering. In specific, you underestimated the fixed cost of ordering by a factor of 2, i.e., fixed cost of ordering is actually twice of what you used in your model. Compared to the EOQ quantity obtained with the incorrect ordering cost, your true optimal EOQ quantity (with the correct value for the ordering cost) a. decreases c. doubles e. increases, but by a factor less than 2 b. remains unchanged O d. more than doubles

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