Inventory control: definition of Economic Order Quantity (EOQ) Select what EOQ represents within inventory control theory. Choose the correct meaning.
Mechanical Engineering
Industrial Engineering and Production Management
Difficulty: Easy
Choose an option
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AAverage inventory level
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BOptimum lot size (order quantity)
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CWarehouse capacity
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DLot size at accounting break-even
Answer
Correct Answer: Optimum lot size (order quantity)
Explanation
ConceptEOQ is the order quantity that minimizes the total of annual ordering and holding costs under classical assumptions (constant demand, instantaneous replenishment, no shortages).
Final AnswerOptimum lot size (order quantity)