Businesses use the EOQ formula to help them reduce their overall inventory costs. For example, let’s say you own a successful business that sells duffel bags. Based on your historical data ...

Example of How to Use Economic Order Quantity ... and the fixed cost to place an order is $2. The EOQ formula is the square root of (2 x 1,000 pairs x $2 order cost) / ($5 holding cost) or ...

EOQ calculations are rarely as simple as this example shows. Here the intent is to explain the main principle of the formula. The small business with a large and frequently turning inventory may ...

For example, consider a retail clothing shop that ... and the fixed cost to place an order is $2. The EOQ formula is the square root of (2 x 1,000 shirts x $2 order cost) / ($5 holding cost ...