Economic Order Quantity

on . Posted in Project Management Engineering

Economic order quantity, abbreviated as EOQ, is the ideal order quantity that a company should make for its inventory given a set cost of production.


Economic Order Quantity Formula

\(\large{ EOQ =  \frac{ 2 \; D \; CPU }{ HC }  }\) 
\(\large{ EOQ }\) = economic order quantity
\(\large{ D }\) = demand in units (typically on an annual basis)
\(\large{ HC }\) = holding cost (per unit, per year)
\(\large{ CPU }\) = cost per order (per purchase order)


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