scholarly journals A Revision on Cost Elements of the EOQ Model

2016 ◽  
Vol 11 (1) ◽  
pp. 5-14 ◽  
Author(s):  
Mehdi Rajabi Asadabadi
Keyword(s):  
Capital Cost ◽  
Decision Makers ◽  
Economic Order Quantity ◽  
New Order ◽  
Order Quantity ◽  
Setup Cost ◽  
Total Cost ◽  
Eoq Model ◽  
Proposed Model ◽  
Holding Cost

AbstractThe overall objective of this paper is to investigate the fundamental cost elements of the traditional EOQ model and develop the model by expiring some of its unrealistic assumptions. Over the last few decades, there have been numerous studies developing the EOQ model, but the basic cost elements of the EOQ model have not been investigated efficiently. On the other hand, the capital cost of buying inventories seems to be important to be investigated separately as well as holding cost and ordering cost in the model. In this paper, the capital cost of the inventory and possible stepwise increases in holding and setup cost are taken into account to make a revised formula to compute the economic order quantity. The proposed model involves explicitly the capital cost of buying the inventories in the EOQ model to ensure the decision makers that their financial concerns are considered in the revised model and the new order quantity results the minimum total cost.

scholarly journals APLIKASI QUICK BASIC DALAM PERHITUNGAN ECONOMIC ORDER QUANTITY DAN BIAYA YANG BERHUBUNGAN

2016 ◽  
Vol 3 (2) ◽  
pp. 107
Author(s):  
Yudha Herlambang
Keyword(s):  
Programming Language ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Order Quantity ◽  
Setup Cost ◽  
Total Cost ◽  
First Derivative ◽  
Optimum Quantity ◽  
Holding Cost ◽  
Manufacture Company

As we know that the trading or manufacture company should decide the optimum quantity of the inventory must be available. The optimum Quantity called Econo-mic Order Quantity is the amount of inventory, which reach the Minimum Total Cost. When the company calculated the optimum quantity, there is some parame-ter must be known, for example : Setup Cost (Order Cost), Holding Cost, and Demand. Because all of this parameter can influence each other . In this article the author will be derived the formula of Economy Order Quantity based on the concept of Calculus Mathematic called Derivative of The Function. In order the extreem point from Total Cost reach minimum vaue, there is the First Derivative from the Total Cost has zero value. The author also design the program to calculate all the parameter above by using the Quick Basic Programming Language in Com-puter Simulation. By using the Computer Programming, we can calculate the para-meter above quickly and otomatically.

scholarly journals Tinjauan Kapasitas Persediaan Produk Fuji Seat PT. Tri Jaya Teknik Karawang

2021 ◽  
Vol 5 (1) ◽  
pp. 33
Author(s):  
Aries Adiyanto ◽  
Dene Herwanto
Keyword(s):  
Raw Materials ◽  
Raw Material ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Order Quantity ◽  
Administrative Costs ◽  
Eoq Model ◽  
Engineering Company ◽  
Holding Cost ◽  
The Cost

PT. Tri Jaya Teknik Karawang is an engineering company engaged in fabrication, machining and side parts. PT. Tri Jaya Teknik started pioneering a business since 2007 and started owning and occupying its own workshop in 2009. Currently the company already has 2 plant workshops with a total area of 3,080 m2 and has about 100 employees. One of the products produced is Fuji seat, based on the data collected there are 3 parts of the process. The 3 parts of the process are repair 1, repair 2, repair 3. With each there is a check parts & packing table. The method used in companies to manage raw material inventories is still conventional, namely by making continuous purchases without estimating according to needs. So that there is often an excess of raw materials or a shortage of raw materials at a certain time, this makes the costs incurred inefficient and often disrupts the production process. A review of the inventory capacity of Fuji Seat products in this study was carried out using the Economic Order Quantity (EOQ) model. The main raw material inventory data used is Fuji Seat in the 2016-2019 period. Holding cost raw materials is set by PT. Tri Jaya Teknik Karawang is 2.5% of the price per pcs, this value is used for procurement and repair of tools and equipment in the warehouse. If there is no damage, the cost is allocated to the warehouse manager in that month. Meanwhile, the cost of ordering which consists of the price of goods and shipping costs is determined by PT. Tri Jaya Teknik Karawang, amounting to IDR 100,000.00. This fee includes administration and transportation costs. Administrative costs, namely executive salaries and other supporters, as well as taxes related to the company. The cost of shipping transport is the distance traveled and the weight of the product ordered. Based on the calculation of EOQ (Economic Order Quantity), the most economical amount of raw materials using the EOQ model is 6,815.5 Pcs with 187 purchases a year. PT. Tri Jaya Teknik Karawang adalah perusahaan engineering yang bergerak di bidang fabrikasi, machining dan part samping. PT. Tri Jaya Teknik mulai merintis bisnis sejak tahun 2007 dan mulai memiliki dan menempati workshop sendiri di tahun 2009. Saat ini perusahaan telah memiliki 2 plant workshop dengan total luas 3.080 m2 dan memiliki karyawan berjumlah sekitar 100 orang. Salah satu produk yang dihasilkan adalah fuji seat, berdasarkan data yang dikumpulkan ada 3 bagian proses. 3 bagian proses itu adalah repair 1, repair 2, repair 3. Dengan masing-masing terdapat meja check part & packing. Metode yang digunakan pada perusahaan untuk mengelola persediaan bahan baku masih secara konvensional, yaitu dengan melakukan pembelian terus menerus tanpa memperkirakan sesuai dengan kebutuhan. Sehingga seringkali terjadi kelebihan bahan baku atau kekurangan bahan baku di saat tertentu, hal ini membuat biaya yang dikeluarkan menjadi tidak efisien dan sering kali mengganggu proses produksi. Tujuan penelitian ini yaitu mampu mengetahui perhitungan EOQ dan frekuensi pembelian yang paling ekonomis dalam perusahaan. Tinjauan kapasitas persediaan produk Fuji Seat dalam penelitian ini dilakukan dengan menggunakan model Economic Order Quantity (EOQ). Data persediaan bahan baku utama yang digunakan adalah Fuji Seat pada periode 2016-2019.Biaya penyimpanan bahan baku di tetapkan oleh pihak PT. Tri Jaya Teknik Karawang sebesar 2,5% dari harga per pcs, nilai tersebut digunakan untuk keperluan pengadaan dan perbaikan 

scholarly journals EOQ Revisited with Sustainability Considerations

2013 ◽  
Vol 38 (4) ◽  
pp. 223-249 ◽  
Author(s):  
M. Can Arslan ◽  
Metin Turkay
Keyword(s):  
Inventory Control ◽  
Economic Model ◽  
Policy Making ◽  
Economic Order Quantity ◽  
Order Quantity ◽  
Bottom Line ◽  
Total Cost ◽  
Eoq Model ◽  
Economic Considerations ◽  
Deterministic Setting

Abstract The economic order quantity (EOQ) model is a pure economic model in classical inventory control theory. The model is designed to find the order quantity so as to minimize total cost under a deterministic setting. In this study, we revise the standard EOQ model to incorporate sustainability considerations that include environmental and social criteria in addition to the conventional economic considerations. We propose models for a number of different policies and analyze these revised models. Based on our analysis, we show how the triple bottom line considerations of sustainability be appended to traditional cost accounting in EOQ model. We also provide a number of useful insights for decision and policy making practices.

Chance-Constrained Programming EOQ Model Based on Uncertain Measure

2011 ◽  
Vol 50-51 ◽  
pp. 150-154
Author(s):  
Li Xia Rong
Keyword(s):  
Economic Order Quantity ◽  
Chance Constrained Programming ◽  
Order Quantity ◽  
Uncertain Measure ◽  
Uncertainty Distribution ◽  
Uncertain Variables ◽  
Eoq Model ◽  
Holding Cost ◽  
Constrained Programming ◽  
Uncertain Distribution

This paper provides chance-constrained programming EOQ (Economic Order Quantity) model for inventory based on uncertain measure. In the model, the ordering cost, shortage cost and holding cost per unit are assumed uncertain variables. When the parameters are some special uncertain variables with uncertainty distribution such as linear uncertain distribution and normal uncertain distribution, the model can be transformed into crisp equivalent programming. To illustrate the effectiveness of the model, some numerical examples are provided.

AN EOQ MODEL WITH GENERALIZED RAMP-TYPE DEMAND AND WEIBULL DISTRIBUTION DETERIORATION

2007 ◽  
Vol 24 (01) ◽  
pp. 93-109 ◽  
Author(s):  
S. PANDA ◽  
S. SAHA ◽  
M. BASU
Keyword(s):  
Weibull Distribution ◽  
Time Horizon ◽  
Infinite Time ◽  
Setup Cost ◽  
Total Cost ◽  
Eoq Model ◽  
Replenishment Policy ◽  
Holding Cost ◽  
Ramp Type Demand ◽  
Weibull Distribution Deterioration

An inventory model is discussed with generalized ramp-type demand where the time to deterioration follows Weibull distribution. Shortages of inventories are allowed and completely backlogged. Total cost is derived by trading off setup cost, holding cost, deterioration cost, and shortage cost. The optimal replenishment policy for a single period is derived by minimizing the total cost per unit time over infinite time horizon. A numerical example is presented and sensitivity analysis is also carried out. The rationale for generalized ramp-type demand is discussed.

EOQ Model with Controllable Lead Time, Setup Cost and Backordering Rate

2011 ◽  
Vol 204-210 ◽  
pp. 464-469 ◽  
Author(s):  
Bo Huang ◽  
Wei Dong Meng ◽  
Yu Yu Li
Keyword(s):  
Lead Time ◽  
Optimal Solution ◽  
General Distribution ◽  
Inventory Level ◽  
Order Quantity ◽  
Setup Cost ◽  
Safety Stock ◽  
Total Cost ◽  
Eoq Model ◽  
Controllable Lead Time

This paper developed an EOQ model, in which the demand follows a general distribution, under the assumption that lead time can be shortened and setup cost can be reduced by added investment, and backorder rate depends on inventory level and price discount in the period of shortage. We proved the existence and uniqueness of optimal solution and proposed an algorithm searching for it. We find that order quantity, safety stock and inventory total cost can be normally reduced by shortening lead time and reducing setup cost, furthermore, backordering parameter and probability of shortage have a great impact on inventory total cost, so an enterprise should do its best to reduce probability of shortage, especially when backordering parameter is small.

scholarly journals Analysis Inventory Cost Jona Shop with EOQ Model

2021 ◽  
Vol 3 (1) ◽  
pp. 21-25
Author(s):  
Abigail Vania ◽  
Hanni Yolina
Keyword(s):  
Lead Time ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Order Quantity ◽  
Inventory Cost ◽  
Valid Model ◽  
Inventory Costs ◽  
Eoq Model ◽  
Holding Cost

Jona Shop is located in Indonesia, Jakarta is currently having a problem. The problem is the shop’s owner thinks that the inventory costs are too big especially for a powdered drink which brand is “Nutrisari”. The author finishes an EOQ (Economic Order Quantity) model for minimize the inventory cost. EOQ model is an old model but a valid model which still used now. Even EOQ model is an old model, many researchers used EOQ model to minimize inventory cost until 50% or more than 50%. But the EOQ model has some assumptions and Jona Shop fulfilled all the assumptions in the EOQ model. The assumptions of EOQ model are demand is known and constant, the lead time is constant and known, only one product can be estimated, every order is accepted in one-time delivery and can be used right away, there is no backorder because run out stock, no discount, and the holding cost per year and the ordering cost per year are constant. The result of the EOQ model can save up to almost 90%.

Sistem Informasi Pengendalian Persediaan Barang Menggunakan Metode Economic Order Quantity (EOQ)

IJAcc ◽  
2020 ◽  
Vol 1 (2) ◽  
pp. 132-139
Author(s):  
Erna Astriyani ◽  
Desy Apriani ◽  
Meri Mayang Sari
Keyword(s):  
Control System ◽  
System Design ◽  
Inventory Control ◽  
Economic Order Quantity ◽  
Economic Order ◽  
Control System Design ◽  
Order Quantity ◽  
Microsoft Excel ◽  
Total Cost ◽  
Control Information

The system that is currently running in recording inventory at PT Berlina Tbk Tangerang is considered ineffective and efficient because it still uses paper and the process of inputting and recapping goods data is semi-computerized in Microsoft Excel. which causes problems, namely too much stock of goods so that it increases the load in the warehouse and too little stock of goods which results in an exhaustion of stock in the warehouse. To solve this problem, we need an inventory control information system. The method of analysis uses the EOQ (Economic Order Quantity) method. For the system design process using sublime as the writing language and programming PHP, and XAMPP as localhost, the database uses MySQL. This study aims to design an inventory control system in the HRD department at PT Berlina Tbk Tangerang, and to make it easier for the HRD Department to input and create inventory reports. With this research, it can produce an inventory control system design that is more effective and efficient and can find out the storage costs in the warehouse. From the calculation of the EOQ method, it is found that it is 20% smaller than the previous storage and the total cost of ordering in a year is 2x orders. Thus, it means that there is a very real difference between the inventory policies implemented by the company and the EOQ method.

scholarly journals Retailer’s optimal ordering policies for EOQ model with imperfective items under a temporary discount

2016 ◽  
Vol 26 (2) ◽  
pp. 219-240
Author(s):  
Wen Lin ◽  
Horng Chang
Keyword(s):  
Economic Order Quantity ◽  
Order Quantity ◽  
Objective Functions ◽  
Inventory Models ◽  
Screening Process ◽  
Numerical Examples ◽  
Closed Form Solutions ◽  
Eoq Model ◽  
Optimal Ordering ◽  
Special Order

In this article, we study inventory models to determine the optimal special order and maximum saving cost of imperfective items when the supplier offers a temporary discount. The received items are not all perfect and the defectives can be screened out by the end of 100% screening process. Three models are considered according to the special order occurs at regular replenishment time, non-regular replenishment time, and screening time of economic order quantity cycle. Each model has two sub-cases to be discussed. In temporary discount problems, in general, there are integer operators in objective functions. We suggest theorems to find the closed-form solutions to these kinds of problems. Furthermore, numerical examples and sensitivity analysis are given to illustrate the results of the proposed properties and theorems.

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