Warehouse & 3PL Glossary

Economic Order Quantity (EOQ)

Also known as: EOQ

Economic order quantity (EOQ) is the ideal order size that minimizes the combined cost of ordering and holding inventory. The formula balances setup and ordering costs against carrying costs to find the quantity that keeps total inventory cost lowest.

In the warehouse: Teamship's WMS puts Economic Order Quantity (EOQ) to work as part of Inventory Management.

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Related terms

Always Better Control (ABC) InventoryAnnual Holding CostBonded WarehouseFirst In, First Out (FIFO)Inventory Stock TurnoverJust-in-Time (JIT) Inventory
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