Croesus Enterprises $($CE$)$ strictly applies the Economic Order Quantity $($EOO$)$ model to determine the optimal order

quantity for an inventory item used in its manufacturing processes. Recently. CE successfully negotisted a reduction

in warehouse storage insurance premiums, resulting in a decrease in the holding cost assocuted with esch batioh of

the inventory item.

Given the change in the holding cost, ceteris paribus, what are the expected effects on the EOQ and the totat

annual ordering cost?

A$.$ EOQ is expecied to decresse and the total annual ordering cost is expacted to increase

B$.$ eCDis evectad to increase and the total aninual ondening cost is expocted to decresse

C$.$ EOQ is expectad to decrease, and the total annual ardering cost is expected to decresse.

EOQ is expected to incresse, and the total arrual ordering cost is expected to increase.