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Defining EOQ

Economic Order Quantity or EOQ is the order size which helps in the reduction of the total cost thereby giving a boost to maximum economy.

It can be explained with the help of an equation.



D = Demand rate

S = Setup costs

I = Interest rate

P = Production cost

Factors determining Economic Order Quantity

There are mainly 2 factors of economic order quantity that is considered before ordering certain quantity.

  • The cost regarding ordering materials
  • The cost involved in carrying or possessing the required materials

Carrying cost associated with inventories

There are certain constituents of carrying cost that is related to inventories. We have explained those with proper descriptions and examples in EOQ homework help service. Here you can see a summarized version of those.

  • Storage cost
  • Shrinkage and deterioration of stocks
  • Handling cost
  • Abstinence of stocks
  • Interest on investment of working capital
  • Property tax and insurance

Extra factors added in EOQ assignment help service

Through our assignment help, you will come to know about the various factors that are related to economic order quantity. Some of those aspects which you will get help on are as follows:

  • What would ordering cost look like for a financial year?
  • What is the total relevant cost?
  • What would holding cost look like for a fiscal year?
  • Factors regarding reorder point
  • Various formulas associated to it
  • Impact of inventory in cash flow planning

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