ECONOMIC ORDER QUANTITY Definition

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ECONOMIC ORDER QUANTITY is the order quantity that minimizes total inventory costs. A total inventory cost is the sum of ordering, carrying and stock-out costs.

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BILLINGS IN EXCESS OF COSTS see COST IN EXCESS OF BILLINGS.

CAPITAL RECEIPTS is proceeds from the sale of capital assets. They may be used to finance new capital expenditure or repay existing loan debt. Receipts available to finance capital expenditure in future years are normally held in the usable capital receipts reserve.

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