The amount of inventory to order that will total the minimum total ordering and holding costs is called the ________.
A) Economic Order Quantity (EOQ)
B) Reorder Point (ROP)
C) Economic Reorder Point (ERP)
D) Point of Economic Quantity (PEQ)
E) None of the above

Question

Quizplus · Accepted Answer

Economic Order Quantity (EOQ) is the amount of inventory that should be ordered to minimize the total ordering and holding costs. It takes into account the ordering cost, holding cost, and demand to determine the optimal quantity to order. This helps in maintaining an efficient level of inventory and reduces the overall cost of inventory management.

The Amount of Inventory to Order That Will Total the Minimum