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Daniel Trumpe has computed the EOQ for a product he sells to be 400 units. However, due to recent events he has a cash flow problem. Therefore, he...
Daniel Trumpe has computed the EOQ for a product he sells to be 400 units. However, due to recent events he has a cash flow problem. Therefore, he orders only 100 units each time he places an order. Which of the following is true for this situation?
A. Annual ordering cost will be lower than annual holding cost.
B. Annual ordering cost will be higher than annual holding cost.
C. Annual ordering cost will equal annual holding cost.
D. Annual ordering cost will be unaffected by the order policy change.
E. Nothing can be determined without more information.
