Data for an independent-demand item maintained

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Reference no: EM131758700

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Consider the following data for an independent-demand item maintained by Angie Bonpensiero, the proprietor of a local auto repair shop:

Weekly demand = 50 units

Ordering cost = $8/order

Holding cost = $4/unit/year

Weeks in a year = 50

Use the information in Scenario 9.6. Due to new ordering procedures initiated by Bonpensiero, the ordering cost is drops to $4 per order. At the same time, the weekly demand increases to 64 units per week due to an increase in business. What effect do these changes have on the EOQ quantity for this item?

A. The EOQ quantity remains unchanged.

B. The EOQ quantity increases by 20%.

C. The EOQ quantity decreases by 20%.

D. Sufficient information is not available to answering this question.

Reference no: EM131758700

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