Abstract
This paper presents a comparison between Just-in-Time (JIT) and Economic Order Quantity (EOQ) production system based on unit total cost concept. The conventional EOQ lot-size model ignores the effects of damage rate and setup time on lot-size. We compare both systems which are based on a particular view of lot size, setup times and damage rate. New EOQ and unit total cost formulae are developed by taking into account the effects of the above mentioned factors. When damage cost is not considered, the unit total cost of a JIT system for single stage is slightly higher than that of a EOQ system. Otherwise, EOQ lot-size could be equal to JIT lot-size under some conditions. The JIT system which has no damage cost is compared to the EOQ system which has damage cost by the proposed formulae. The conclusion shows that JIT lot-size is better than EOQ lot-size only within some range. Otherwise, the latter is better. The results are only a part of the general decision about optimum lot-size.
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