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Economic Order Quantity
EOQ
Difference between revisions of "EOQ"
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===Calculation=== | ===Calculation=== | ||
{{math|{{this}}|{{sqrt|{{frac|2DS|H}}|3}}}} | {{math|{{this}}|{{sqrt|{{frac|2DS|H}}|3}}}} | ||
| + | where | ||
| + | * D = Annual demand | ||
| + | * S = Ordering costs per order | ||
| + | * h = Annual inventory holding cost | ||
Alternative names for {{this}} include: Optimal Order Quantity. | Alternative names for {{this}} include: Optimal Order Quantity. | ||
{{object | {{object | ||
Revision as of 00:52, 13 August 2017
Economic Order Quantity or Economic Order Quantity Optimization is a Term describing the Practice to determine the optimal quantity for replenishment orders. The Economic Order Quantity model balances inventory costs with ordering costs.
Calculation
| Economic Order Quantity | |||||
| = |
| ||||
where
- D = Annual demand
- S = Ordering costs per order
- h = Annual inventory holding cost
Alternative names for Economic Order Quantity include: Optimal Order Quantity.
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