The function of the economic order quantity method is to hold down both order costs and inventory costs.

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The economic order quantity method aims to find the optimal order size that minimizes both order costs (including setup costs, shipping costs, etc.) and inventory holding costs (including storage costs, obsolescence costs, etc.). This allows businesses to balance the costs of ordering too frequently (resulting in high order costs) versus ordering too infrequently (resulting in high inventory carrying costs).

The Function of the Economic Order Quantity Method Is to Hold