The Basic Economic Order Quantity (EOQ) Model is a business tool used to calculate the most cost effective order quantity for inventory. It helps businesses determine how much of an item to order each time so that the amount ordered covers their needs without leading to wasted resources from overordering. By taking into account various factors such as lead times, carrying costs, and cost per item, the model helps ensure that businesses get the optimal number of items to meet their demand but not too many. This keeps businesses operating efficiently and cost-effectively, ensuring maximum profitability.