Question

be the same as ordering cost. The production rate would be about double the usage rate. Compared to the EOQ, the economic production quantity would be approximately:

Answer 1

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Answer:

C. 40% larger

Step-by-step explanation:

Economic order quantity(EOQ) is used in inventory management to reduce holding costs and ordering costs by sticking to the best order quantity that can achieve this. From the above, Economic order quantity should be able to reach usage rate but the company has switched from buying to producing and since production is twice usage rate, Economic production quantity(EPQ) should be larger than Economic order quantity and about 40% (from the options)