Economic Order Quantity EOQ Chapter 10 - PowerPoint PPT Presentation

1 / 10
About This Presentation
Title:

Economic Order Quantity EOQ Chapter 10

Description:

Christina Wright. EOQ Defined. The optimal order quantity that will minimize total inventory costs. Also referred to as the 'economic lot-size model' Basic EOQ Model ... – PowerPoint PPT presentation

Number of Views:1479
Avg rating:3.0/5.0
Slides: 11
Provided by: meliss130
Category:

less

Transcript and Presenter's Notes

Title: Economic Order Quantity EOQ Chapter 10


1
Economic Order Quantity (EOQ) (Chapter 10)
  • Melissa Daly
  • Kelli Johnson Watson
  • Christina Wright

2
EOQ Defined
  • The optimal order quantity that will minimize
    total inventory costs.
  • Also referred to as the economic lot-size model

3
Basic EOQ Model
  • Demand is known with certainty and is constant
    over time
  • No shortages are allowed
  • Lead time for the receipt of orders is constant
  • The order quantity is received all at once

4
Inventory Order Cycle
5
Computations
  • Total annual ordering cost
  • Annual ordering cost CoD / Q
  • Total annual carrying cost
  • Annual carrying cost CcQ / 2
  • Total annual inventory cost
  • TC CoD / Q CcQ / 2

6
EOQ Cost Model
7
Optimal value of Q
  • CoD / Q CcQ / 2
  • Q2 2CoD / Cc
  • Qopt square root of 2CoD / Cc

8
Total minimum cost
  • TCmin CoD / Qopt CcQopt / 2

9
For example
10
Questions?
  • ? ? ? ? ?
  • ? ?
Write a Comment
User Comments (0)
About PowerShow.com