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    EOQ calculation: what is the revised EOQ?

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    Question 12: A product whose EOQ is 40 experiences a decrease in ordering cost from $90 per order to $10. The revised EOQ is:

    a) three times as large
    b) one-third as large
    c) nine times as large
    d) one-ninth as large
    e) cannot be determined

    Please select the right answer and explain how you have calculated it.

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    Solution Preview

    EOQ = SQRT ( 2 X Demand x Ordering Cost / Holding Cost)

    Let 2 x ...