While Working a Simple EOQ Problem, You Notice That, with a Certain

Multiple Choice

While working a simple EOQ problem, you notice that, with a certain lot size, the annual ordering cost is exactly the same value as the annual inventory carrying cost. Which of the following is true?

A) the lot size is the economic order quantity
B) total cost is at its maximum
C) the annual carrying cost will decrease if the order quantity is increased
D) all of the above
E) none of the above; the phenomenon is merely a coincidence