ANALYZING THE APPLICATION OF EOQ MODEL AND SAFETY STOCKS STRATEGY IN THE PLANNING AND CONTROL OF STOCKS - A CASE STUDY OF A S&P 500 COMPANY

This is a case study paper, which concentrates on the application of EOQ (Economic Order Quantity) model in a specific manufacturing company in Suzhou, China. It intends to find out an optimal solution for minimizing total inventory cost. Real data information is collected and applied in EOQ model w...

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Bibliographic Details
Main Authors: Zuo, Ling-Yan, Li, Chuan-Jiang
Format: Conference Proceeding
Language:English
Subjects:
Case studies
Cost control
Costs
Discounted cash flow
Economic models
Fuzzy sets
Inventory
Inventory control
Inventory management
Manufacturing
Methods
Opportunity costs
Order quantity
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Summary:This is a case study paper, which concentrates on the application of EOQ (Economic Order Quantity) model in a specific manufacturing company in Suzhou, China. It intends to find out an optimal solution for minimizing total inventory cost. Real data information is collected and applied in EOQ model which can determine the optimum order size by analyzing holding costs and ordering costs of the stocks to obtain the optimal solution. However, the basic EOQ model was structured under simple even ideal conditions. Therefore, many researchers refine the EOQ model in accordance with specific situation, environment and purpose of application to acquire a relatively accurate consequence in the real world. In addition, EOQ usually connect with safety stocks issues, because there is uncertainty of the amount of demand or usage of stocks in practice. It is avoidable that limitations such as insufficient analytical data sample and assumptions of market environment exist in this study, but it can provide a direction for how to research the stocks issues in a manufacturing company.
ISSN:1934-0583
1934-0583