|Economic order quantity is defined as the ordering quantity which minimises the balance of cost between inventory holding costs and re-order costs.Underlying assumptions in an Economic Order Quantity model are:
Note that the rationale of EOQ ignores buffer stocks which are maintained to cater for variations in lead time and demand.
- Stock Control (Part 1)
- Stock Control System- Re-Order Level System (Part 3)
- What are the advantages and disadvantages of using the Re-order Level Inventory control system
- Explain What Are Stock Reorder Level, Maximum, Minimum and Safety or Buffer Stock Level, Their Purpose And Formula.
- Explain what are the limitations of Cost Volume Profit (CVP) Analysis For Short Term Decision Making