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The concepts of Just-in-Time (JIT) and Lean have led many to question the continued relevance of Economic Order Quantity (EOQ), whose function is to identify the optimum order with the lowest cost parameter. In response, yes, it is still valid as a basic analytic tool, however, many supply chain industry executives perceive it as “old school” or don’t even know about it. My experience has shown that
many individuals and some companies cannot apply it—even if they wanted to—because they do not know their acquisition costs to place an order or their yearly inventory carrying cost rate.