Economic order quantity is a modelled order size that balances ordering costs against inventory holding costs. It addresses how much to order, rather than the stock level at which a new order should be triggered.[1]
Treat the result as a starting point and examine the assumptions. Irregular demand, supplier minimums, short shelf life or limited storage can justify a different quantity. An order size that minimises modelled costs is not automatically feasible or appropriate for every product.
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Compiled with AI assistance using public sources. General explanation, not individual legal or tax advice. Describing a concept does not mean Zoloo offers it as a feature.