What is EOQ?
EOQ stands for Economic Order Quantity. It is an inventory management formula that helps businesses find the optimal quantity of a product to order to minimize the total costs of ordering and holding inventory. EOQ takes into consideration factors such as demand rate, ordering costs, and holding costs. The main objective of EOQ is to strike a balance between the costs associated with ordering too frequently or too infrequently. By using the EOQ formula, businesses can make informed decisions about how much stock to order, when to place orders, and how much to hold in inventory to ensure efficient operations and minimize costs.
This mind map was published on 16 January 2024 and has been viewed 147 times.
