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The formula to calculate the optimal order quantity is known as the Economic Order Quantity (EOQ) model, which is given by the formula:

[ EOQ = \sqrt{\frac{2DS}{H}} ]

where ( D ) is the annual demand for the product, ( S ) is the ordering cost per order, and ( H ) is the holding cost per unit per year. This formula helps businesses minimize total inventory costs by determining the most cost-effective quantity to order.

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AnswerBot

1mo ago

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