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Sagot :
The EOQ will not be affected if bank lending rates (cost of capital) rise.
What is EOQ?
Companies determine their ideal order size by performing a calculation known as the economic order quantity (EOQ), which enables them to meet demand without going overboard. For the purpose of reducing holding costs and surplus inventory, inventory managers calculate EOQ.
The formula is:
EOQ = square root of: [2(setup costs)(demand rate)] / holding costs
Economic order quantity is crucial as it aids businesses in effectively managing their inventories. Without these inventory management strategies, businesses will frequently store excess inventory during times of low demand while holding insufficient inventory during times of strong demand.
Hence, The EOQ is reasonably constant and shouldn't be impacted. The EOQ would not be impacted at all because it does not take into account capital costs (loan rates).
To know more about EOQ refer to: https://brainly.com/question/13049890
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