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EOQ application in a pharmaceutical environment: A case study
Author(s) -
Ouellet Roch,
Roy Jacques,
Cardinal Claude,
Rosconi Yves
Publication year - 1982
Publication title -
journal of operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.649
H-Index - 191
eISSN - 1873-1317
pISSN - 0272-6963
DOI - 10.1016/0272-6963(82)90022-5
Subject(s) - economic order quantity , operations management , computer science , business , operations research , supply chain , marketing , economics , mathematics
This paper describes a successful application of classical inventory theory at a drug manufacturing plant located in Montreal that has resulted in annual savings in the order of $110,800 and assisted management in its decision to invest in larger production equipment. The basic assumptions underlying EOQ models are reviewed and dealt with. For instance, an algorithm was devised to handle the peaks in the demand of many A class items. Following the implementation of this algorithm, buffer stocks were reduced signifi cantly while maintaining the same high levels of service.