The economic order quantity is usually smaller that the optimal order size.

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The economic order quantity (EOQ) is the optimal order size that minimizes the total inventory costs, including ordering costs and holding costs. The EOQ is usually smaller than the optimal order size because the EOQ takes into account the trade-off between ordering costs and holding costs. Ordering costs are the costs of placing an order, such as the cost of shipping and handling. Holding costs are the costs of holding inventory, such as the cost of storage and insurance. The EOQ is the order size that minimizes the total of these two costs.

The Economic Order Quantity Is Usually Smaller That the Optimal