In production processes, inventory management is crucial for balancing costs and efficiency. Economic Production Quantity (EPQ) is a key metric that calculates the optimal quantity to produce during each production cycle. By considering demand rate, setup cost, and holding cost, EPQ minimizes total inventory costs. It determines the setup period (T) and production period (t), allowing manufacturers to optimize inventory levels. Maintaining optimal inventory levels reduces storage costs, minimizes waste, and ensures continuous production.
