The document discusses the economic order quantity (EOQ) model, which is used to determine the optimal order quantity that minimizes total costs of ordering and holding inventory. It assumes known constant demand, lead times, instant receipt of orders, no quantity discounts or stockouts. The EOQ formula balances ordering costs and holding costs to find the quantity that results in the lowest total costs. An example calculates the EOQ of 80 coffee makers for a shop ordering 1000 per year with order and holding costs specified.