The economic order quantity formula balances the cost of ordering an item against the cost of storing an item.

Name: The economic order quantity formula balances the cost of ordering an item against the cost of storing an item.
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The Economic Order Quantity (EOQ) formula is designed to minimize the total cost of inventory management by finding the ideal order quantity that balances ordering costs (such as delivery charges and order processing costs) with holding costs (such as storage and insurance).

The Economic Order Quantity Formula Balances the Cost of Ordering