Answer:
EOQ means Economic Order Quantity
Reorder point means ROP
Explanation:
EOQ means Economic Order Quantity is total units of inventory that a company should purchase so as to minimize the total costs of inventory which are holding costs, order costs, and shortage costs.
The reorder point (ROP) is the level of inventory that calls for replenishment of that stock. That is, the lowest point a company can go on a particular stock before ordering .
I prefer and would recommend ordering optimal order quantity the point at which holding cost equals ordering cost at the reorder level= safety stock +(usage rate+ lead time)
Holding cost=Average inventory level*Holding cost
Ordering cost= Average number of order* ordering cost
Safety stock is stock held in excess of expected demand
Usage rate is an estimate rate of usage
Lead time is time between placing an order and receiving it.
