The economic order quantity model:

A) determines ordering costs.
B) determines total costs involved in holding inventory.
C) is a mathematical tool for determining the order quantity that minimises the costs of ordering and holding inventory.
D) is a mathematical tool for determining shortage and ordering costs.

Economic Order Quantity

An inventory management formula used to determine the optimal order quantity that minimizes the total costs related to ordering, receiving, and holding inventory.

Ordering Costs

Expenses incurred in placing and receiving orders from suppliers, including costs related to processing and shipping.

Holding Inventory

The costs and activities associated with storing unsold goods or materials, including warehousing and insurance.