<P> In inventory management, economic order quantity (EOQ) is the order quantity that minimizes the total holding costs and ordering costs . It is one of the oldest classical production scheduling models . The model was developed by Ford W. Harris in 1913, but R.H. Wilson, a consultant who applied it extensively, and K. Andler are given credit for their in - depth analysis . </P> <P> EOQ applies only when demand for a product is constant over the year and each new order is delivered in full when inventory reaches zero . There is a fixed cost for each order placed, regardless of the number of units ordered . There is also a cost for each unit held in storage, commonly known as holding cost, sometimes expressed as a percentage of the purchase cost of the item . </P>

What is basic eoq model of inventory management