CONCLUSION

Victoria Corporation should use to have a better income is the Economic Order
Quantity (EOQ) because the EOQ model assumes steady demand of a business
product and immediate availability of items to be re-stocked. It does not account for
seasonal or economic fluctuations. It assumes fixed costs of inventory units, ordering
charges and holding charges. This inventory model requires continuous monitoring of
inventory levels. The effectiveness of the basic EOQ model is most limited by the
assumption of a one-product business, and the formula does not allow for combining
several different products in the same order.

Thus, if Victoria Corp.s overall cost of inventory is minimized through

economic order quantity, it would decrease its cost of goods sold (COGS), increase its
gross profit, potentially decrease various operating costs and increase bottom line profit.