Economic Order Quantity (EOQ) is a formula used in inventory management to determine the optimal order quantity for a particular product. It helps businesses strike a balance between the costs associated with carrying inventory and the costs of ordering and restocking inventory. EOQ is designed to minimize the total cost of inventory, taking into account both holding costs and ordering costs.

Here's the formula for EOQ:

EOQ = √[(2DS)/H]

Where:

EOQ = Economic Order Quantity
D = Annual demand (number of units sold or used per year)
S = Ordering or setup cost per order
H = Holding or carrying cost per unit per year