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Economic Order Quantity (EOQ)
A formula that calculates the optimal order size to minimize the total costs associated with purchasing, receiving, and holding inventory.
Carrying Cost
Carrying cost includes expenses associated with holding or storing inventory, such as insurance, storage, and opportunity costs.
Annual Demand
Annual demand refers to the total quantity of a product or service that consumers are willing and able to purchase over a year.
Average Collection Period
The average time it takes for a business to collect payments owed by its customers.
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