It may make sense for companies to hold larger quantities of inventory because of the benefits of economic purchase orders.

Question

Quizplus · Accepted Answer

Economic purchase orders, also known as EPQ, are quantities of inventory that are ordered at one time in order to take advantage of discounts offered by suppliers. By ordering more inventory at once, companies can save money and reduce costs per unit. Holding larger quantities of inventory can also provide a buffer against unexpected increases in demand or supply chain disruptions.

It May Make Sense for Companies to Hold Larger Quantities