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What is the meaning of the term "Economic Order Quantity" with reference to Inventory Management?

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Question added by Deleted user
Date Posted: 2014/08/17
Anayatullah Tahir
by Anayatullah Tahir , Finance Manager , Etqan Projects

Economic Order Quantity is the optimum quantity of a product to be ordered, so that the total of carrying cost and ordering cost is minimum. Whenever the inventory level reaches order point we place the order equal to EOQ. The formula is well known to all financial people to be underroot of the expression (2Xtotal demandXordering cost/ carrying cost per unit)

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