Economic Order Quantity
Economic order quantity is a simple inventory management model that many companies and software programs utilize to determine the point at which the combination of inventory order costs and inventory carrying costs are the least - thus most profitable to the company. The result is the most cost effective quantity to order. When you have repetitive purchasing/ sales of an item, EOQ can prove beneficial. Though EOQ is generally recommended where usage is constant, items with demand variability such as seasonality can still use the model by going to shorter time periods.
S = Annual Usage (sales) in units
O = Order cost per order
C = The carrying cost per unit per period
Q = The order quantity
Expressed in units, this is generally is based on prior year unit sales, forecasted unit sales, a combination of both, or even last 6 months unit sales extrapolated based on current market conditions - thing is you can pick and choose what is best in your situation.