Economic order quantity - a tool for inventory management - a case study

Abstract

Inventory refers to the stock of the products, a firm is offering for sale and the stock of sub-components that make up the product. In this research, the economic order quantity method for inventory management is used. In inventory management, economic order quantity (EOQ) is the order quantity that minimises the order quantity, ordering cost, number of orders, total annual cost, carrying cost, order size and average inventory. The purpose of this model is to decide order quantity and reorder point. This research goes throughout the process of analyse the company's current forecasting model and recommends an inventory control model. Order quantity and reorder point was recommended to reduce product inventory. In this work, a case study has been done for optimal inventory control, applied to B. Brown Medical India Pvt. Ltd. The researcher analyses a single product inventory in which cyclic review of inventory control, where separate unsystematic demand may be satisfied. A numerical study is provided to add insight into the results.