Economic Order Quantity (EOQ) Flashcards
1
Q
What is meant by the Economic Order Quantity (EOQ)?
A
It is the most economical amount of items to order at a time, considering when the ordering costs and carrying costs are both at their lowest.
2
Q
In the EOQ equation, what does the D stand for?
A
Annual demand.
3
Q
In the EOQ equation, what does the Q stand for?
A
Quantity of material ordered.
4
Q
In the EOQ equation, what does the C stand for?
A
Carrying costs.
5
Q
In the EOQ equation, what does the S stand for?
A
Ordering costs.
