Monday, May 11, 2020

The Economic Order And Manufacture Quantity - 1017 Words

The economic order/manufacture quantity (EOQ/EMQ) model developed by Harris (1913) is the earliest reported scientific treatment of inventory systems, where the sum of inventory costs, ordering/setup and holding costs, is minimized. Its simple mathematics and ease of calculation is perhaps what contributed to its popularity with practitioners and academicians (e.g., Fulbright, 1979; Osteryoung et al., 1986). The EOQ/EMQ model continues to be celebrated by many researchers (Andriolo et al., 2014; Drake and Marley, 2014; Glock et al., 2014; Bushuev et al. 2015). The model’s popularity overshadows few critical voices (e.g., Selen and Woods, 1987; Woolsey, 1990; Weiss, 1990). Many derivatives of the EOQ/EMQ appeared over the years, of which just-in-time (JIT) is one of them (e.g., Andriolo et al., 2014). In contrast to the classical EOQ/EMQ model, just-in-time (JIT) produces a product when needed and delivers it when wanted by customers. JIT considers inventory as a waste to be reduced by producing in smaller lots more frequently, so fewer items are in the pipeline (Bonney and Jaber, 2011). It also improves quality, productivity, responsiveness, machines availability, workforce flexibility, space and equipment utilization, flow, and relationship with suppliers (Cavinato, 1990; Jones, 1990; Mehra and Inman, 1992). JIT is based on continuous improvement of which reducing setup time (cost) is its primary driver (Zangwill, 1987; Jones, 1990;Cavinato, 1991). Readers are referred toShow MoreRelatedEconomic Order Quantity and Its Implementation on Business1103 Words   |  5 PagesECONOMIC ORDER QUANTITY AND IT’S IMPLMENTATION IN BUSINESS Any business man, executive, and entrepreneur should know the basic tools for a company to develop in the market, regardless how big the business is, there are many factors involve. It is very important in every business to handle well developed financial and logistics processes. 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