The Total Inventory Cost Formula, also known as the Economic Order Quantity (EOQ) formula, is an important tool used in inventory management. It provides a way to calculate the ideal order quantity for inventory items based on factors such as ordering and carrying costs, demand rate, and lead time. The goal of using this formula is to minimize the total cost associated with managing and stocking inventory while still meeting customer demands, so that businesses can achieve maximum efficiency and profitability. With the right approach, the Total Inventory Cost Formula can help businesses make smart decisions when it comes to ordering and stocking inventory.