Economic Buy Quantity or Just-in-time Products on hand Models
Tameka T. Levy
April 20, 2011
There are many models that have been developed to deal with the trade-off between placing your order and holding costs of inventory. The 2 that will be reviewed is the Monetary Order Variety (EOQ) model and the Just-in-time (JIT) style. First, a brief history and meaning of the theories will be reviewed. Secondly, it will have a comparison of those two versions presented. Third, organizations that employ the EOQ and JIT model will be mentioned and an explanation will be given on how every single organization gained in their operations from using these particular models. The EOQ unit is a mathematical model that minimizes the overall of initial ordering costs plus immediate carrying expense for the period. In addition , it specifies the dimensions of order to place every time inventory is purchased (Ainsworth & Deines, 2011). The EOQ model was developed by F. W. Harris in 1913, but Ur. H. Wilson, a specialist who used it broadly, is given credit rating for his early thorough analysis than it (Hax, 1984). The JIT inventory unit is a long-run model based on the basic principle that products on hand should appear just as required for production inside the quantities needed (Ainsworth & Deines, 2011). JIT is a Japanese management philosophy which has been applied in practice since the early 1970s in several Japanese developing organizations. It had been first developed and perfected within the Toyota manufacturing plants simply by Taiichi Ohno as a means of meeting consumer demands with minimum gaps. Taiichi Ohno is frequently known as the father of JIT (Monden, 1993). There are many differences between your EOQ and JIT model. The EOQ model reflects only short-term carrying and order costs. The EOQ model presumes that inventory ordering and inventory use transpire in uniform cycles throughout the period. However , the JIT is a long-term style based on the principle...
Referrals: Ainsworth, S. and Deines, D (2011). Introduction to accounting: an integrated strategy, 6th education.
New York, BIG APPLE: McGraw-Hill/Irwin.
Hax, A. (1984). Production and inventory managing. Englewood coves,
eHow. Benefits and drawbacks of the Only In Time Products on hand System.
Retrieved by http://www.ehow.com/about_5099120_pro-just-time-inventory-system.html NJ: Prentice-Hall
Monden, Y. (1993) Toyota production system: a built-in approach to Just-In Time. Norcross, Georgia, Industrial Engineering and Management Press
Strategos. Slim in Hard Times-Harley Davidson. Retrieved coming from http://www.strategosinc.com/