The economic order quantity:
A) determines the reorder point.
B) is the lowest cost amount to order considering all costs.
C) determines the safety stock.
D) requires the number of days to maturity.

Question

Quizplus · Accepted Answer

The economic order quantity (EOQ) is the quantity of goods or materials that should be ordered at one time in order to minimize the total cost of ordering and holding or carrying them. EOQ considers all costs, including ordering costs, holding costs, and the cost of the goods themselves, and calculates the quantity that will result in the lowest total cost. It does not determine the reorder point, safety stock, or require the number of days to maturity.

The Economic Order Quantity