EOQ Workbench
EOQ stands for Economic Order Quantity, the theoretical best quantity to order given certain input parameters. It concerns balancing two costs:
- Setup Cost for each replenishment order
- Carrying Cost of having Inventory on hand
The total cost is the sum of these two costs and the quantity at the point where the total cost is lowest (balancing setup and carry) is the EOQ. EOQ therefore is the tradeoff between smaller more frequent replenishment and large replenishments to minimize the setup cost. You may not be able to use the EOQ, but this enhancement allows you to analyze and minimize the gap in the EOQ Workbench. The goal being to define acceptable replenishment to drive safety stock simulation.
These new calculations (measures) are added:
- Economic Order Quantity (DPLS_INVEOQ)
- EOQ Replenishments Per Year (IPLS_EOQ_REPLEN_PER_YEAR)
- EOQ Annual Carrycharge (IPLS_EOQ_ANNUAL_CARRYCHARGE)
- EOQ Annual Setupcharge (IPLS_EOQ_ANNUAL_SETUPCHARGE)
- EOQ Total Cost (IPLS_EOQ_TOTAL_COST): Total Cost is the sum of Carry Charge and Setup Charge
- CURR Replenishments Per Year (IPLS_CURR_REPLEN_PER_YEAR)
- CURR Annual Carrycharge (IPLS_CURR_ANNUAL_CARRYCHARGE)
- CURR Annual Setupcharge (IPLS_CURR_ANNUAL_SETUPCHARGE)
- CURR Total Cost (IPLS_CURR_TOTAL_COST)
- Current Cost Gap to EOQ (IPLS_CURR_GAP_TO_EOQ)
- Current Cost Gap to EOQ Per (IPLS_CURR_GAP_TO_EOQ_PER)
- This feature is available after loading the demand (dpls.zip) template for this release. It requires a running Inventory Planning cycle period.
- You are not required a new role or privilege access to use this feature. It is accessible to users with roles that have access to the standard Inventory Planning cycle or existing inventory worksheets.
It provides cost-based analysis and simulation capabilities on the tradeoff between smaller more frequent replenishment and larger replenishments to minimize the setup cost.
Define acceptable replenishment to drive safety stock simulation.