EOQ Models Still Work...(When Applied Carefully)

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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 additional production equipment. The basic assumptions underlying EOQ models are reviewed and dealt with. Through a close examination of some peculiar features of demand, buffer stocks were reduced significantly while maintaining the same high levels of service.

, 15 pages