Which one of the following best defines the economic order quantity (EOQ)?
A)Minimum size of an order needed to qualify for free shipping
B)Minimum amount that must be ordered to obtain the quantity discount
C)Number of items that are sold on average each month
D)Restocking quantity that minimizes the total cost of inventory
E)Minimal amount of inventory that must be purchased to receive a cash discount

Question

Quizplus · Accepted Answer

The economic order quantity (EOQ) is the restocking quantity that minimizes the total cost of inventory. It takes into account the costs of ordering and holding inventory, and calculates the optimal order size that balances these costs.

Which One of the Following Best Defines the Economic Order