Which of the two inventory models is better and why: Economic Order Quantity or Just-in-Time?

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Economic Order Quantity (EOQ) is an inventory model that gives input on the optimal number of orders per period and the optimal quantity per order. The result is lowered ordering costs and annual inventory costs. EOQ can only be used in situations where the demand for the product is constant. When demand for a product ...

Solution Summary

The solution compares where Economic Order Quantity model is better than Just-in-Time model.

If D = 9,000 per month, S = $45 per order, and H = $2 per unit per month, what is the economicorderquantity?
Round your answer to the nearest whole number; for example, 1234. Please show your work.

A bakery uses 700 bags of flour per week and works 45 weeks per year. The flour costs $25 per bag. Each time that order is issued it will cose the bakery $100. Carrying costs of the inventory are 15% of unit costs. Determine the economicorderquantity, reorder point, and the average inventory for this bakery.

Lakefield Ice Ltd. sells 25,000 windows per year. The carrying cost per window is $3.70. Currently they order 1,000 windows at a time with a fixed cost per order of $38. If they switch to using economicorderquantity, how much can they reduce their total inventory costs?

As the production manager, you need to minimize both ordering and inventory costs. You need to provide a recommendation of the optimal orderquantity of raw materials to your plant manager. Your objective is to determine the economicorderquantity (EOQ). If the annual demand for Ultamyacin at Wallingford is 400,000 units, the a

Sales are estimated to be 4,500 (d) units annually at $3,000 each. The cost of each unit for Taylor Incorporated is $1,200 (v). Inventory carrying cost is (c) 5% of the cost value of the device. Order placement (p) cost is $60.
I need to know the EconomicOrderQuantity (EOQ).
I already have the equation I just not sure

Apply the economicorderquantity formula to the data in Example 2-2 and reproduce the answer of 2,828 units. Also, calculate the total annual cost incurred for the economicorderquantity. Submit your solution.
EXAMPLE 2-2
Consider a hardware supply warehouse that is contractually obligated to deliver 1,000 units of a sp

(See attached file for full problem description)
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Consider the Economic Lot Size Model and let K be the set-up cost, h be the holding cost per item per unit of time and D the demand rate. Shortage is not allowed and the objective is to find an orderquantity so as to minimize the long-run average cost. That is, the object

Gentle Ben's Bar and Restaurant uses 5,000 quart bottles of an imported wine each year. The effervescent wine costs $3 per bottle and is served only in whole bottles because it loses its bubbles quickly. Ben figures that it costs $10 each time an order is placed, and holding costs are 20 percent of the purchase price. It takes t

Apply the EOQ model to the following quantity discount situation in which D=500 units per year, C0=$40, and the annual holding cost rate is 20%. What orderquantity do you recommend?
Discount Category Order Size Discount (%) Unit Cost
1 0 to 99 0