Economic order quantity
A)the costs of not having a product available when demanded by a customer
B)the costs of carrying inventory
C)approach that maintains goods should be pulled through the system by present demand
D)the number of units in the order quantity that minimizes the total cost
E)the costs of placing and receiving an order

Question

Quizplus · Accepted Answer

Economic order quantity is the number of units in the order quantity that minimizes the total cost. It takes into consideration both the costs of carrying inventory and the costs of placing and receiving an order. It is a formula used to determine the optimal order size for a business to minimize the costs associated with inventory management.

Economic Order Quantity