Which formula represents the calculation of EOQ?

The formula for the Economic Order Quantity (EOQ) is correctly represented as the square root of (2cd/h). EOQ is a crucial concept in inventory management that aims to determine the optimal order quantity a company should purchase to minimize logistics and inventory costs.

In this formula, 'c' stands for the cost per order, 'd' symbolizes the annual demand, and 'h' represents the holding or carrying cost per unit per year. By using the square root, the formula effectively balances the trade-off between the costs incurred for ordering and holding inventory. As businesses calculate EOQ, they achieve a point at which these costs are minimized, ensuring that they do not order too frequently (which incurs higher order costs) or hold too much inventory (which incurs higher holding costs).

This understanding allows businesses to streamline their inventory management processes, leading to improved efficiency and reduced operational costs.