Economic Order Quantity

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Asprova MRP

Asprova MRP is calculated on the memory requirement, allocate lead time at a high speed. Can achieve material arrangement Just in Time, which is impossible in other MRP system.

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MRP glossary TOP > E > Economic Order Quantity

Economic Order Quantity　EOQ,Economic Lot Size

More order quantity and less order frequency bring less order cost, but the inventory and inventory carrying cost increase. In order to reduce the inventory carrying cost, in contrast, less order quantity and more order frequency bring more order cost. Economic Order Quantity (EOQ for short) refers to the best order quantity to make the total cost minimum by considering the balance between ordering cost and inventory carrying cost, which are contradictory. In Economic Order Quantity as a method for lot sizing by MRP, the Economic Order Quantity for each item is calculated in advance and entered to the item as the EOQ value. In MRP, lot sizing is performed according to the EOQ value in the same method as Fixed Order Quantity. For how to calculate an EOQ value and how to size lots, see Economic Lot Size and Fixed Order Quantity, respectively.

Related term: Lot Sizing,Fixed Order Quantity

Reference：JIT Business Research Mr. Hirano Hiroyuki

Economic Lot Size | E | Emergency Order