Economic Order Quantity (EOQ) is an application of balancing cost and a method for deciding how much inventory to buy.
Within the purchasing function this is known as the order quantity, in manufacturing it is known as the production lot size.
Anytime that there is repetitive purchasing or planning of an item, EOQ should be considered.
Common applications for EOQ are purchase-to-stock distributors and make-to-stock manufacturers.
However, make-to-order manufacturers should also consider EOQ when they have multiple orders or release dates for the same items and when planning components and sub-assemblies.