Economic Order Quantity (EOQ)
Determine the optimal order size that minimizes total inventory costs.
Assumptions & Constraints
- • Demand is assumed to be constant and known.
- • Lead time is constant and known.
- • Purchase price is constant (no quantity discounts). This standard model breaks if bulk pricing tiers exist.
Learn the Math
Want to understand the derivation of the EOQ formula and how to adjust for lead time variability?
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