In a business, the owners must decide how much inventory to purchase since there is not a definite way to know how much of each product will sell in a given time. Instead, the owner must predict or forecast how much of their products will sell. They must keep some products in stock. The optimal order quantity refers to the amount of products to buy at a time in order to have a certain amount in the inventory.
There is a certain point when optimal quantity is reached. This occurs when the revenue from improvement equals the incremental costs to achieve the quality. The owner will need to keep track of how many of one product sells in a certain time compared to the other products.
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