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What makes EOQ work for inventory control?

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Question ajoutée par Wasi Rahman Sheikh , WAREHOUSE SUPERVISOR , AL MUTLAQ FURNITURE MFG
Date de publication: 2016/02/27
Ahmed Mohamed Ayesh Sarkhi
par Ahmed Mohamed Ayesh Sarkhi , Shared Services Supervisor , Saudi Musheera Co. Ltd.

Agree with expert answer

and sorry i'm not expert on this filed

 

Vaseem Ahamad
par Vaseem Ahamad , Associate Director Operations , Perfetti Van Melle

EOQ formula works under ideal scenario i.e no fluctuation in demand & lead time, there is no discount for bulk purchase, 

But such scenario does not exist in practical work hence EOQ needs improvisation to work.

The EOQ is derived by optimize the total cost function.

Vinod Jetley
par Vinod Jetley , Assistant General Manager , State Bank of India

The EOQ works if its four assumptions match the case it is used on. The assumptions are: A. Annual demand, carrying costs and ordering costs can be estimated. B. Inventory level is divided by 2, no safety stock, goods used uniformly and are gone by next order. C. Stockout, customer responsivenss and other costs not considered. D. No quantity discounts.

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