EOQ

The EOQ value compares the purchase order's cost (and related receiving and invoicing costs) against the cost of carrying stock in inventory using the Carrying Cost Percent and Order Cost Amount values (which can be overridden) from the Location tab in the Inventory Items function. This value is most accurate when a good deal of history is available to support the calculation.

After calculating the EOQ value, if applicable, the system suggests this value as the reorder quantity if the inventory Available quantity falls below the Order Point value. Generally, the higher the cost of an item, the lower the purchase quantity, The EOQ value is calculated by this formula:

Reorder Quantity = EOQ = sqrt ((2 * Annual Usage * Order Cost) / (Unit Value * Carrying Cost Pct))