# Economic Order Quantity Technique

What is the Economic Order Quantity technique and what are the basic assumptions the model formula follows? What are some different companies that could benefit from using this type of inventory management and why?

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What is the Economic Order Quantity technique and what are the basic assumptions the model formula follows? What are some different companies that could benefit from using this type of inventory management and why?

The economic order quantity is the amount of inventory that reduces the inventory holding costs and ordering costs to its minimum. Essentially, this is an inventory-related equation that gives its user the optimum order quantity that a company should hold given a fixed cost of production, demand and other costs. The objective of the equation is to minimize the inventory costs. The equation is expressed as EOQ = Square root of ...

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This solution discusses economic order quantity, an inventory-related equation that gives its user the optimum order quantity, along with its assumptions. This solution is 340 words.