20.A company uses the Economic Order Quantity (EOQ) model and holds no buffer inventory.Its annual cost of holding one unit in inventory has decreased.What is the effect, if any, of this decrease in holding costs on the EOQ and on the total annual cost of placing orders?
答案：The EOQ is the number of items of inventory which it is most economic to order. If holding costs fall then more items of inventory can be held for the same cost and the EOQ will increase.
The annual cost of placing orders will decrease as by ordering more inventory at a time the organisation will make fewer orders during the year.
