Fouad Alshehri’s Post

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CSCP | PMP | CSCM | supply chain | logistics | stock Replenishment | procurement | materials planning | demand planner | master production schedule | #MRP #MPS #SAP #ERP #MM_module

I believe zero inventory is a risky specifically when leading time more than month. in contrast, delay or penalty will cost much more than hiring a warehouse. so inventory is must but with optimal quantity. #inventory #inventory_efficiency #MRP

View profile for Mohamed Abdelnasser, graphic

Supply Chain Process Excellence | Continuous Improvement | Optimization | I Help Companies Streamline Operations & Boost Efficiency | CPIM | CIPS 4

Maximizing Inventory Efficiency with EOQ In the world of inventory management, the Economic Order Quantity (EOQ) model stands out as a pivotal tool for minimizing the costs associated with ordering and holding inventory. EOQ helps businesses determine the optimal number of units to order, ensuring that inventory levels are aligned with demand while keeping costs under control. 📦 Understanding EOQ 👌 The EOQ formula is given by: EOQ=Squar root of [2DS/H] Where: • ( D ) = Annual demand in units • ( S ) = Ordering cost per order • ( H ) = Holding cost per unit per year Real-World Example Imagine a company that requires 50,000 units of a component annually. The cost to place an order is $1,000, and the holding cost per unit is $2 per year. Plugging these values into the EOQ formula gives us an optimal order quantity that minimizes total inventory costs. EOQ = Squar root of [2*50,000*1,000]/2 = 2,236 Unit 📦 Visualizing EOQ with Graphs Graphs play a crucial role in visualizing the relationship between ordering costs, holding costs, and the total cost. The EOQ point is where the total cost curve is at its lowest, indicating the most cost-effective order quantity. Implementing EOQ Before applying EOQ, it’s essential to consider factors like - 📊 demand consistency - ⌛️ order lead times, - 💰 cost fluctuations. When these elements are stable, EOQ can significantly streamline inventory management and reduce costs. For more insights on EOQ and inventory optimization, feel free to connect and discuss! Remember to adjust the numbers and context to fit your specific industry or case study. Also, you can include a graph that shows the EOQ curve reaching its minimum point, illustrating the balance between ordering and holding costs. #innovation #managment #digitalmarketing #creativity #futurism #startups #supplycahin #sustinability #productivity #eoq #fundraising #law #strategy #culture #fashion #business #networking #inspiration

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