Economic Order Quantity

Question

Question

business finance

Answer 1

Answer #1

Economic order quantity(EOQ)

It is the size of the order for which both:
1. ordering and
2. carrying cost
are at a minimum.

It is used in an optimizing stock control system.
Economic order quantity is a reorder quantity.

Formula: EOQ=
√{(2× Annual Consumption ×Cost of placing an order)/Cost of carrying per unit per annum}

Answer 2

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