The Economic Order Quantity (EOQ) Formula is a management accounting tool used to calculate the optimal order quantity for stocking inventory. It determines the most efficient purchase amount to minimize costs associated with ordering and holding inventory. The formula takes into account a number of related costs, such as ordering cost, inventory carrying cost, and shortage cost. By combining these three costs into one calculation, the EOQ formula can be used to maximize savings and profits for businesses by optimizing their supply chain process. In short, it’s an incredibly useful tool for businesses looking to make the most of their inventory process!