Describe EOQ decision model.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Describe EOQ decision model.
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Step 1
Economic order quantity (EOOJ:
Economic order quantity is ideal order quantity that the company should purchase the inventory with the ideal level. The economic order quantity (EOQ) approach assumes that some inventory must be held for future production. The main objective of the EOQ is to balance the ordering costs against the holding costs of inventory.
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