The EOQ formula produces the answer. The ideal order quantity comes about when the two parts of the main relationship (shown above)—”HQ/2″ and the “SD/Q”—are equal.

The economic order quantity, or EOQ, is the optimal number of units a business should purchase when replenishing inventory while minimizing inventory costs that could eat into profit margins.

Learn what Economic Order Quantity (EOQ) is and how it minimizes inventory costs. Discover its significance in maintaining optimal inventory levels and controlling cash flow.

The classical EOQ formula assumes that all relevant costs and prices are constant. In this paper it is shown that with inflation the choice of the inventory carrying charge used in the EOQ formula ...