How can the EOQ model help optimize inventory management?

The Economic Order Quantity (EOQ) model is a valuable tool in optimizing inventory management. It allows businesses to determine the most efficient order quantity that minimizes inventory carrying costs while meeting customer demand. By considering factors such as ordering costs, carrying costs, and demand rates, the EOQ model calculates the ideal order quantity that prevents inventory shortages or excesses. This helps businesses maintain adequate stock levels, reduce holding costs, and avoid wastage. By optimizing inventory management using the EOQ model, businesses can improve cash flow, minimize storage costs, and enhance overall operational efficiency.

This mind map was published on 12 January 2024 and has been viewed 50 times.