The function of EOQ is to hold down both order costs and inventory costs.

Question

Quizplus · Accepted Answer

EOQ (Economic Order Quantity) is a formula that helps in determining the optimal quantity of inventory to order that minimizes the total cost of ordering and holding inventory. By calculating the EOQ, a company can balance the costs of placing frequent small orders versus the cost of holding excess inventory. Thus, the primary function of EOQ is to minimize both order costs and inventory costs. Therefore, the statement is true.

The Function of EOQ Is to Hold Down Both Order