Inventory Management is an integral part of effective management and is a concept that cannot be ignored. All successful organizations dealing in the supply of goods need to incorporate effective inventory management in their functions so that they are able to make cost savings and reap benefits in the form of increased profits. Economic Order Quantity is a great tool for managing inventory as it helps determine the exact quantity of stock that should be transported together so as to ensure minimum cost of transportation. EOQ is calculated by making use of relevant data that can be gathered from the supply chain process. Some important inputs need to be considered in order to effectively calculate this amount. The results derived from here can be used to come up with an inventory management process that is economically viable and results in minimum expenditure.
The concept of EOQ can be traced back to the 1930s and is still used today because of the huge benefits that it provides to organizations that practice. Many organizations are still unable to make use of Economic Order Quantity as a part of their inventory management process because of the difficulty in calculation and the lack of knowledge regarding its correct measurement. The formula is timeless and the results received from it can be used effectively for increasing profits in the long run. One major problem that may hamper the effective usage of EOQ is the use of inaccurate or incorrect data. For EOQ to be used advantageously, it is essential that the inputs used are accurate and properly verified.
The concept of Economic Order quantity was developed after it was observed that a certain quantity when transported helps an organization transport its goods at the cheapest cost. This quantity can vary depending on the goods to be transported and various other factors. The Economic Order Quantity for each scenario and each product turns out to be different. Several parameters have to be considered before arriving at the Economic Order Quantity. Companies can then use the results received to transport their products to customers at minimum cost to themselves.
McLane Logistics Technology provides customized Inventory Management Software system for businesses. For more details visit them at 4002 Central Pointe Parkway, Temple, TX 76504. You can also call at 1-800-989-7568.
The concept of EOQ can be traced back to the 1930s and is still used today because of the huge benefits that it provides to organizations that practice. Many organizations are still unable to make use of Economic Order Quantity as a part of their inventory management process because of the difficulty in calculation and the lack of knowledge regarding its correct measurement. The formula is timeless and the results received from it can be used effectively for increasing profits in the long run. One major problem that may hamper the effective usage of EOQ is the use of inaccurate or incorrect data. For EOQ to be used advantageously, it is essential that the inputs used are accurate and properly verified.
The concept of Economic Order quantity was developed after it was observed that a certain quantity when transported helps an organization transport its goods at the cheapest cost. This quantity can vary depending on the goods to be transported and various other factors. The Economic Order Quantity for each scenario and each product turns out to be different. Several parameters have to be considered before arriving at the Economic Order Quantity. Companies can then use the results received to transport their products to customers at minimum cost to themselves.
McLane Logistics Technology provides customized Inventory Management Software system for businesses. For more details visit them at 4002 Central Pointe Parkway, Temple, TX 76504. You can also call at 1-800-989-7568.
