Unformatted text preview: For example, if the order size is 20 percent above the EOQ (600 units), tic increases by only $333/$20,000 = 1.67%. • If the quantity ordered is less than the EOQ, then total carrying costs decrease, but total ordering costs increase. At q = 400 units, carrying costs fall by $2,000 per year, but ordering costs increase by $2,500. The net result is an increase in total costs. • If the quantity ordered is greater than the EOQ, then total carrying costs increase, but total ordering costs decrease. At Q = 600 units, carrying costs increase by $2,000, but ordering costs fall by only $1,667, so the net result is an increase in total costs....
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- Spring '08
- Order theory, Compact space, Total order, total ordering costs, costs increase