Define what is meant by economic order quantity.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter10: Inventory
Section: Chapter Questions
Problem 1Q: What is meant by the term gross margin?
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Define what is meant by economic order quantity.

 

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For the purpose to minimize the inventory purchase cost in order to reduce the total cost of products, companies use the EOQ method to identify the minimum cost at which the units can be ordered.

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