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this video shows you how to do production order quantity now its different than economic order quantity because economic order quantity we are purchasing our inventory from somebody else and so because of that we basically are not producing it and so well go from zero back up to our economic order quantity now the interesting thing about production order quantity is that we will produce to a certain point and we will want to stop because thats where our holding cost equal our our ordering cost or our set-up cost and so once again the idea is that both of those are minimized now the difference here is that while were producing were also using or selling some of that inventory so were not going to go from zero all the way back up to that point even though we will produce to that point were actually going to carry a little less in inventory and so youll see that it is modified on the form of the sheet this is the production order quantity one here youll see that its modified th
