How is the economic order quantity $($EOQ$)$ calculated?

Group of answer choices

By dividing annual demand by ordering cost

By multiplying annual demand by holding cost.

By subtracting holding cost from ordering cost. The square root of this value gives us the Economic Order Quantity.

We first multiply the annual demand by the ordering cost per order, then multiply that result by $2,$ and finally divide by the holding cost per unit per year. The square root of this value gives us the Economic Order Quantity.