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Economic order quantity. Economic order quantity ( EOQ ), also known as financial purchase quantity or economic buying quantity, [citation needed] is the order quantity that minimizes the total holding costs and ordering costs in inventory management. It is one of the oldest classical production scheduling models.
The economic production quantity model (also known as the EPQ model) determines the quantity a company or retailer should order to minimize the total inventory costs by balancing the inventory holding cost and average fixed ordering cost. The EPQ model was developed and published by E. W. Taft, a statistical engineer working at Winchester ...
The quantity theory of money (often abbreviated QTM) is a hypothesis within monetary economics which states that the general price level of goods and services is directly proportional to the amount of money in circulation (i.e., the money supply ), and that the causality runs from money to prices. This implies that the theory potentially ...
Minimum efficient scale. In industrial organization, the minimum efficient scale ( MES) or efficient scale of production is the lowest point where the plant (or firm) can produce such that its long run average costs are minimized with production remaining effective. [ 1] It is also the point at which the firm can achieve necessary economies of ...
A unit of measurement, or unit of measure, is a definite magnitude of a quantity, defined and adopted by convention or by law, that is used as a standard for measurement of the same kind of quantity. [ 1] Any other quantity of that kind can be expressed as a multiple of the unit of measurement. [ 2] For example, a length is a physical quantity.
Marginal cost. In economics, the marginal cost is the change in the total cost that arises when the quantity produced is increased, i.e. the cost of producing additional quantity. [ 1] In some contexts, it refers to an increment of one unit of output, and in others it refers to the rate of change of total cost as output is increased by an ...
Level of measurement or scale of measure is a classification that describes the nature of information within the values assigned to variables. [ 1] Psychologist Stanley Smith Stevens developed the best-known classification with four levels, or scales, of measurement: nominal, ordinal, interval, and ratio. [ 1][ 2] This framework of ...
Economic batch quantity. In inventory management, Economic Batch Quantity (EBQ), also known as Optimum Batch Quantity (OBQ) is a measure used to determine the quantity of units that can be produced at the minimum average costs in a given batch or product run. EBQ is basically a refinement of the economic order quantity (EOQ) model to take into ...