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Economic Order Quantity (EOQ) is a quantitative technique used in cost accounting and inventory management to determine the optimal order size that minimizes the total cost of inventory. The total cost considered in EOQ includes ordering cost and carrying (or holding) cost. The primary objective of EOQ is to identify the most economical quantity of materials to be ordered so that the combined cost of ordering and storing inventory is as low as possible. It is an important tool for efficient materials control and helps management in avoiding overstocking ________ ____ __________ ___ ___.
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