The picture on the left shows a typical inventory graph when demand is stable over time. The picture on the right shows that the Economic Order Quantity is reached at the point where the holding cost and the setup cost are equal.

In the picture on the left, what do the green upward arrows represent?

Period* tot cost Min.=EOQ Period * holding cost (negative of this slope) R =rate of consump Units in inventory Cost, $ EOQ = Period * setup cost UO 2RK h OO EOQ Time Order Quantity * The period may be 1 yr, or 1 atr, or 1 wk, or 1 day, etc