What is the economic order quantity (EOQ)?
A)the quantity that minimizes total ordering cost
B)the quantity that maximizes total profit
C)the quantity that minimizes total inventory-related costs
D)the quantity that maximizes carrying costs

Question

Quizplus · Accepted Answer

EOQ is the ideal order quantity a company should purchase to minimize its inventory costs such as holding costs, shortage costs, and order costs. It does not directly concern maximizing profits or carrying costs but aims to minimize the total inventory-related costs.

What Is the Economic Order Quantity (EOQ)