Search Results for: supply-planning

… of supply parameter values that can be adjusted and then uploaded to a system.
How the EOQ Formula Can be Adjusted before High Periods to Build Inventory
Companies often receive a disproportionate amount of demand in one reoccurring period. The EOQ value can be adjusted and then uploaded to the supply planning system in advance of this increased demand to build inventory to the right level more economically. There are two differences regarding doing this versus using the standard EOQ calculation.

The timing must be right – that is, the broader economic order quantity formula must be calculated sufficiently ahead of …

… be 1.644.

So now we take the 75 units and multiply them by 1.644, which yields 123.3.
Because our error is a composite value of both demand and supply variability, this safety stock level should cover us for 95% of the scenarios.

How Should EOQ and Other Supply Planning Parameters be Calculated?
One would be able to, for example:
Item #1: Simulation
Set the supply planning parameters in a way that one can simulate the impact on the overall supply plan. When using supply planning systems, inventory parameters are typically managed on a “one by one” basis …

… formula as a check is at least warranted.”
This quotation envisions the EOQ as a check to compare against human judgment. This paper was written in 1913, and no computers were used in this or any other area. The EOQ formula that Harris was proposing would be calculated by hand. Supply planning software applications do not compute EOQ formulas.
Changing the Cost of Computing the EOQ Formula
This changes the cost of computing the formula. It also changes the interpretation of how the EOQ formula can be used.
One would like to go back in time to ask Harris a …