The Economic Order Quantity Formula (EOQ) is a business tool used to optimize inventories. It helps organizations determine the optimal size of orders given the costs associated with placing and storing them. By calculating EOQ, businesses can find the most cost-effective levels for purchasing, holding, and disposing of inventory. With this knowledge, companies can maximize their profits by ordering just the right amount of product to meet demand without overspending. Companies that use the EOQ Formula are able to keep their inventory levels at a manageable level, while reducing lead times, storage costs, and stockouts. This ensures that they never miss out on potential sales due to lack of stock availability. With the help of the EOQ Formula, businesses of all sizes can confidently maintain an appropriate balance between their costs and profits.