The purpose of the EOQ model is to minimize the sum of inventory order costs (or production setup) and holding (carrying) costs. The EOQ equals the square root of twice the annual demand multiplied by the variable cost per order, divided by the unit periodic holding cost.

The entry to record a write-down is a debit to inventory over and short and a credit to inventory. This amount is reported as an adjustment of cost of goods sold or as an other expense on the income statement.

After a problem has been formulated into any mathematical model, it may be subjected to sensitivity analysis. Sensitivity analysis examines how the model's outcomes change as the parameters change.

Truth-in-lending laws are disclosure statutes. They typically apply to creditors that extend consumer credit to individual debtors. Examples of disclosures for a closed-end credit transaction, e.g., the typical car loan, include the total finance charge. Annual percentage interest rate, amount financed, late charges, security interest held by the creditor, the number and amounts of payments, due dates, and the total amount of payments.