What is the main focus of the Economic Order Quantity (EOQ) method?

The Economic Order Quantity (EOQ) method primarily concentrates on finding the optimal order quantity that minimizes the total costs associated with inventory management. This includes both ordering costs—which are the expenses incurred every time an order is placed—and holding or carrying costs, which are the costs of storing inventory. By calculating the EOQ, businesses can efficiently balance these costs, ensuring they do not overstock (which increases holding costs) or understock (which can lead to frequent ordering and higher overall costs).

This focus on cost reduction directly supports better inventory management practices, ultimately leading to improved cash flow and resource allocation. As a result, organizations can maintain the right level of inventory while minimizing unnecessary costs. The other options, while relevant to supply chain and inventory management in their own right, do not capture the core objective of the EOQ method, which is specifically aimed at optimizing order quantities for cost efficiency.