Economic order quantity (EOQ) logic states that, for a given inventory item, total variable cost is the sum of ordering costs and inventory carrying costs. This logic presupposes that ordering costs are balanced against (equal to) inventory carrying costs. Generally, safety stock carrying costs and out-of-stock costs are ignored, the latter often because of the inability of measure stockout costs in any acceptable fashion. Also ignored is the interaction between the optimal order period calculation and the safety stock calculation.

Economic Order point (EOP) is computed as the sum of mean demand through lead time plus safety stock. Mean demand through lead time is the product of mean weekly demand times the expected value of the lead time (L) in weeks.

https://dl.acm.org/doi/pdf/10.5555/800134.804390#:~:text=EOP%20is%20computed%20as%20the,time%20(L)%20in%20weeks.