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Economic Order Quantity
A formula used to determine the optimal order size that minimizes the total inventory holding costs and ordering costs.
Carrying Cost
The total cost of holding inventory, including storage, insurance, taxes, opportunity costs, and depreciation.
Fixed Costs
Costs that do not change when the quantity of output changes during a particular time period.
Break-Even Default Rate
The rate of default at which a lender breaks even on a loan, neither earning a profit nor incurring a loss.
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