Economic Order Quantity (EOQ)
EOQ = √(2·D·K / h) - order-size that minimises total ordering + holding cost for a spare.
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Formula, assumptions, and limits
| Symbol | Meaning | Unit |
|---|---|---|
| Annual demand | units | |
| Order setup cost | USD | |
| Holding cost per unit per year | USD |
Source: Wilson (1934) - Scientific routine for stock control
In short
EOQ = \u221a(2\u00b7D\u00b7K / h) - order-size that minimises total ordering + holding cost for a spare.