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  • Economic Order Quantity

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    Sujit Dutta Mazumdar
    271 visualizações4 páginas
    Economic order quantity (EOQ) is the inventory level that minimizes total inventory holding and ordering costs based on a model developed by F.W. Harris and analyzed further by R.H. Wilson. The EOQ model balances ordering costs, carrying costs, and procurement costs to find the point where holding and ordering costs are equal. It assumes known, constant demand; equal, constant order sizes; predictable lead times; and considers costs of ordering and holding inventory over time.

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    Economic order quantity

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    Economic order quantity

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    Economic order quantity (EOQ) is the inventory level that minimizes total inventory holding and ordering costs based on a model developed by F.W. Harris and analyzed further by R.H. Wilson. The EOQ model balances ordering costs, carrying costs, and procurement costs to find the point where holding and ordering costs are equal. It assumes known, constant demand; equal, constant order sizes; predictable lead times; and considers costs of ordering and holding inventory over time.

    Direitos autorais:

    Attribution Non-Commercial (BY-NC)
    Baixe no formato PPTX, PDF, TXT ou leia online no Scribd
    Sinalizar o conteúdo como inadequado
    271 visualizações4 páginas

    Economic Order Quantity

    Enviado por

    Sujit Dutta Mazumdar
    Economic order quantity (EOQ) is the inventory level that minimizes total inventory holding and ordering costs based on a model developed by F.W. Harris and analyzed further by R.H. Wilson. The EOQ model balances ordering costs, carrying costs, and procurement costs to find the point where holding and ordering costs are equal. It assumes known, constant demand; equal, constant order sizes; predictable lead times; and considers costs of ordering and holding inventory over time.

    Direitos autorais:

    Attribution Non-Commercial (BY-NC)
    Baixe no formato PPTX, PDF, TXT ou leia online no Scribd
    Sinalizar o conteúdo como inadequado
    de 4

    Economic Order Quantity

    Introduction
    Economic order quantity is the level of inventory that minimizes the total inventory holding costs and ordering costs. The framework used to determine this order quantity is also known as Wilson EOQ Model. The model was developed by F. W. Harris in But still R. H. Wilson is given credit for his early in-depth analysis of the model.

    EOQ is the point at which inventory carrying cost are equal to order costs. There are three types of costs: Ordering costs. Carrying costs. Procurement Costs.

    EOQ Assumptions
    Demand is assumed to be known with certainly.

    The size of each order is constant.


    The procurement cost is assumed to be linearly related to the number of order.

    The time between placement of the order and the receipt of the order is known and constant.
    The receipt of inventory is instantaneous

    the cost of the placing an order and the cost of holding or storing inventory overtime.

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