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The document discusses economic order quantity (EOQ), which is a technique used to determine the optimal order quantity to minimize total inventory costs. EOQ models include the 'Q' model, where a fixed quantity is ordered when inventory reaches a reorder point, and the 'P' model, where inventory is ordered at fixed periods. The mathematical EOQ formula is provided to calculate the quantity that minimizes total annual costs based on annual demand, ordering costs, and carrying costs. Examples are given to demonstrate calculating EOQ.
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The document discusses key concepts related to inventory management. It defines inventory and inventory systems, and describes different types of inventory like raw materials, work in process, and finished goods. It also discusses reasons for holding inventory, costs associated with inventory like holding and ordering costs, and methods for measuring and controlling inventory levels like economic order quantity and reorder point models. The document provides an overview of inventory management fundamentals.
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The document discusses inventory management. It defines inventory and describes the different types including raw materials, work in progress, and finished goods. It outlines the objectives of inventory management as maintaining an optimal inventory level to maximize profitability while ensuring continuous production. Effective inventory management aims to minimize total inventory costs by balancing ordering, stockout, and carrying costs. Classification methods and inventory models are also discussed.
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Economicorderquality eoq-090228222456-phpapp01
- 1. Presentation On Economic order quantity ‘ EOQ’ 06/28/11 XIDAS, Jabalpur
- 12. Graphic presentation of ‘Q’ Model 06/28/11 XIDAS, Jabalpur E O Q RE-ORDER LEVEL BUFFER STOCK MAXIMUM LEVEL MINIMUM LEVEL E G I N V E N T O R Y TIME PERIOD K A B C D
- 15. Example: Q. Calculate the economic order quantity if annual demand for the product is 5,000 unit. The ordering cost is Rs 30 per order and holding cost is Rs 6/- per unit per annual. Sol:- Given R=5000 unit Cp= Rs. 30 Ch=Rs. 6 Now, _____ EOQ = J ( 2RCp/ CH) _____ = J(2*5000*30/6) ______ = J 5000 = 224 or 22.5 units. 06/28/11 XIDAS, Jabalpur
- 19. 06/28/11 XIDAS, Jabalpur Graphical Presentation of ‘P’ Model Q U A L I T Y UNITS OF STOCK Replenishment level R1 15 days Y1 Y2 Y3 R3 R1 G S3 R2 S2 S1 S2 R2 R3 S3
- 22. THANK YOU 06/28/11 XIDAS, Jabalpur
Editor's Notes
- EOQ XIDAS, Jabalpur
- EOQ XIDAS, Jabalpur
- EOQ XIDAS, Jabalpur