EOQ (Economic Order Quantity)
The Economic Order Quantity (EOQ) is a calculation used to define the optimal quantity for which to purchase inventory in a given procurement cycle. Utilizing the EOQ maximizes cost savings by minimizing ordering and holding costs. This process involves determining the minimum total cost of ordering and carrying inventory, while also accounting for any changes in market conditions that may be relevant. By utilizing the EOQ concept, organizations can increase product availability while keeping purchasing costs low.
