EOQ Model discussion Give constructive criticism or feedback or just respond STUDENT ONE the EOQ model considers holding costs and ordering costs when de

EOQ Model discussion Give constructive criticism or feedback or just respond

STUDENT ONE

Don't use plagiarized sources. Get Your Custom Essay on
EOQ Model discussion Give constructive criticism or feedback or just respond STUDENT ONE the EOQ model considers holding costs and ordering costs when de
Just from $13/Page
Order Essay

the EOQ model considers holding costs and ordering costs when determining reorder amounts and frequency. Holding costs are quite literally the cost of space and capital that is being “held up” by the product in the stores rather than allowing that space to be used by another product of for another purpose. While ordering costs are any and all costs associated with the ordering and shipping of product, this cost is increased with each order placed. Through the EOQ model business owners can find the optimal amount of inventory to minimize costs (INC.com, 2018).

I would imagine that EOQ would be helpful in ensuring a store did not run out of a popular product just as much as it would be helpful in minimizing holding and order costs. Because without product you do not have sales, no sales equates to no revenue. For example, there is a small business near me that specializes in livestock feed and equipment. They have serious competition since there are several larger chain style retailers in the area specializing in the same thing. I like shopping small so I check out the store, however sadly multiple times they did not have my specific feed in stock. It was due to poor EOQ planning. But the big store across the street never ran out of my horses’ feed, so where am I forced to shop? The large retailer. Obviously this example shows the importance of proper EOQ modeling and planning, as it can cost business should the poor planning continue to happen. As it was a popular product it would be best for the small business to incur more ordering costs as the holding cost is next to nothing, this product is flying off of the shelf.

STUDENT TWO

Businesses or companies utilize the Economic Order Quantity (EOQ) model for making important decisions on inventory matters. The major inventory costs that are used are inventory costs such as the annual ordering costs predicting the number of orders made multiplied by how much it cost the company to pay for those orders, and the annual carrying cost which is the average inventory multiplied by the inventory carrying cost per unit (Render, et. al., 2018). There are many factors that come into play for finances when it comes to running a business. The EOQ model helps to decide how much to pay to purchase inventory based on the demand rate for items sold per year, the holding costs for items that do not sell, and other variables (Kenton, 2018). Looking at this concrete, factual evidence will accurately allow the business managers to forecast on what they need to order and how much.

An example of when EOQ could be used to improve inventory decisions is my Dad’s small business of sealcoating. He took out a small loan a couple years ago, and got started locally. He has to worry about the seasonal aspect that some months he gets more customers than others, as well as taking in account the costs of the supplies he needs and the costs to store those supplies when he is not actively using them. Small businesses like his could definitely benefit from using EOQ calculations to minimize the cost of their inventory and to make smart inventory decisions on how much to keep in stock at certain times of the year.

Homework Writings Pro
Calculate your paper price
Pages (550 words)
Approximate price: -

Why should I choose Homework Writings Pro as my essay writing service?

We Follow Instructions and Give Quality Papers

We are strict in following paper instructions. You are welcome to provide directions to your writer, who will follow it as a law in customizing your paper. Quality is guaranteed! Every paper is carefully checked before delivery. Our writers are professionals and always deliver the highest quality work.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Reasonable Prices and Free Unlimited Revisions

Typical student budget? No problem. Affordable rates, generous discounts - the more you order, the more you save. We reward loyalty and welcome new customers. Furthermore, if you think we missed something, please send your order for a free review. You can do this yourself by logging into your personal account or by contacting our support..

Essay Delivered On Time and 100% Money-Back-Guarantee

Your essay will arrive on time, or even before your deadline – even if you request your paper within hours. You won’t be kept waiting, so relax and work on other tasks.We also guatantee a refund in case you decide to cancel your order.

100% Original Essay and Confidentiality

Anti-plagiarism policy. The authenticity of each essay is carefully checked, resulting in truly unique works. Our collaboration is a secret kept safe with us. We only need your email address to send you a unique username and password. We never share personal customer information.

24/7 Customer Support

We recognize that people around the world use our services in different time zones, so we have a support team that is happy to help you use our service. Our writing service has a 24/7 support policy. Contact us and discover all the details that may interest you!

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

Our reputation for excellence in providing professional tailor-made essay writing services to students of different academic levels is the best proof of our reliability and quality of service we offer.

Essays

Essay Writing Service

When using our academic writing services, you can get help with different types of work including college essays, research articles, writing, essay writing, various academic reports, book reports and so on. Whatever your task, homeworkwritingspro.com has experienced specialists qualified enough to handle it professionally.

Admissions

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Reviews

Editing Support

Our professional editor will check your grammar to make sure it is free from errors. You can rest assured that we will do our best to provide you with a piece of dignified academic writing. Homeworkwritingpro experts can manage any assignment in any academic field.

Reviews

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.