What is EOQ vs EPQ + ABC Analysis, Vendor Managed Inventory, and JIT
#inventorymanagement #abcanalysis #justintime
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Inventory Management Strategies can help you improve your business by reducing inventory levels and avoiding costly disruptions. In this video, we'll discuss the different types of inventory management strategies and how to apply them to your business.
EOQ (Economic Order Quantity) and EPQ (Economic Production Quantity) are both models used in inventory management to determine the optimal quantity of inventory to order or produce.
The main difference between EOQ and EPQ is that EOQ is used to determine the optimal order quantity for a given inventory item, while EPQ is used to determine the optimal production quantity for a given product.
EOQ is based on the trade-off between ordering costs and holding costs. It determines the order quantity that minimizes the total cost of ordering and holding inventory. EOQ takes into account the cost of placing an order, the cost of holding inventory, and the demand for the inventory item.
EPQ, on the other hand, is used to determine the optimal production quantity that minimizes the total cost of production and holding inventory. EPQ takes into account the cost of setting up a production run, the cost of holding inventory, and the demand for the product.
In other words, EOQ is used to determine the optimal quantity to order from a supplier, while EPQ is used to determine the optimal quantity to produce internally.
Both EOQ and EPQ are important tools in inventory management, as they help businesses optimize their inventory levels and reduce costs. However, the decision to use EOQ or EPQ will depend on whether the business is ordering from a supplier or producing internally.
EOQ, EPQ, ABC Analysis, Reorder Point, Just In Time and JIT II are all important inventory management strategies that you need to know. By understanding these strategies, you'll be able to reduce inventory levels and avoid disruptions in your business. So don't wait, watch this video to learn about the different types of inventory management strategies and how to apply them to your business!
Chapter
00:00 Intro
00:22 Agenda
00:57 Order Cost and Carrying Cost
02:08 EOQ and EPQ Models
02:48 Economic Order Quantity (EOQ)
04:00 Quantity Discount Model
04:35 Economic Production Quantity (EPQ)
05:42 Reorder Point
07:30 ABC Analysis
09:48 Vendor Managed Inventory and Just in Time
12:09 Just In Time II
13:19 Key Takeaways
References used in this video.
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