A new hire. He is responsible for determining the economic order quantity for a particular product. Fabs uses the famous Q∗=2ADh to determine the best order quantity that minimizes the total annual cost of carrying this inventory item. This process continues for a while until he realizes that his calculations have not been accurate.

Fabs has two active orders with the suppliers of Global Imports. In the first order, the order quantity is twice as much as the true Q∗; in the second order, the order quantity is 55% less than the true Q∗. Fabs can cancel one of the two active orders, and he is interested in minimizing the annual holding and ordering costs; annual purchasing costs are not considered in this analysis.

What percentage of cost increase (decrease) he should expect if the larger order is cancelled?