Answer: Set-up costs, carrying costs
Step-by-step explanation:
When it comes to production, the goal is to produce with as little costs as possible so that more profit can be made when the goods are sold.
This is why the Economic Batch Quantity is important. It shows the maximum amount of goods that can be produced in a particular production run such that costs will be minimized.
As such, it is based on the set-up costs of production for that run as well as the carrying costs through the run.