EOQ (Economic Order Quantity) is a fundamental concept in operations management that helps determine the optimal quantity of inventory to order at one time. The objective of EOQ is to minimize the total inventory costs, which include ordering costs and carrying (holding) costs. It provides a scientific basis for deciding how much inventory should be purchased or produced in each order so that the overall cost of inventory management is the lowest. The concept was developed by Ford W. Harris in 1913 and has since become one of the most widely used inventory control techniques. EOQ assumes that demand for the product is known and constant, lead time is fixed, inventory is replenished instantly, shortages are not allowed, and ordering and holding costs remain constant throughout the planning period. Ordering cost refers to the expenses incurred every time an order is placed. These costs include administrative expenses, transportation charges, communication costs, inspection, and documentation. As the order size increases, the number of orders placed during the year decreases, reducing the total ordering cost. Carrying cost, also known as holding cost, represents the cost