What does economic order quantity do?
A)minimizes the total costs of ordering and carrying inventory
B)maximizes the stockout costs
C)minimizes the costs of ordering
D)maximizes the cost of carrying inventory

Question

Quizplus · Accepted Answer

Economic order quantity (EOQ) is a formula used to determine the optimal order quantity that minimizes the total costs of ordering and carrying inventory. It takes into account both the cost of ordering and the cost of holding inventory, and seeks to find the perfect balance between them to minimize overall costs. Therefore, A is the correct answer. B, C, and D are incorrect because they do not accurately describe the purpose of EOQ.

What Does Economic Order Quantity Do