2. For a given demand level, as relevant carrying costs increase and relevant ordering costs decrease, EOQ becomes smaller. That is EOQ decreases to compensate for increases in carrying costs and to take advantage of decreases in ordering costs. That is, the EOQ offsets the effect on total costs of the increase in carrying costs and the decrease in ordering costs. In this example, the change in EOQ results in relevant total costs (RTC) being the same across all three cases. The fact that the total costs are the same is a function of the specific numbers chosen in this example. For example, in the last combination, if relevant carrying costs per unit per year were $35 instead of $40 and relevant ordering costs per purchase order remained at $100, the relevant total costs would equal $8,367.