Optimum Order Quantity to Manage Inventory and Its Cost by Operational Research
Kashyap M. Gupta*
Vadodara Institute of Engineering, Mathamatics Department, Vadodara, India
As per research today’s uncertainties in economy, companies are searching for alternative ways to remain stable in market. This study goes through the process of analyzing the company’s current forecasting model and recommending an inventory control model by ordering optimum units to help them solve their current issue. As a result, an Economic Order Quantity (EOQ) and a variable cost was recommended to help them reduce their product stock outs. The shortage of raw material for production always makes the process discontinuous and reduces the productivity. The ABC analysis technique for the inventory control system is first used to identify the most important multiple products and then the economic order quantity (EOQ) of each product is developed to find their optimum inventory model.
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