Economic Order Quantity Analysis of Packaging Companies' Inventory (in)

Economic production batch

The economic production batch is a model that is widely used in production. Among packaging companies, economic batch production is widely used. Even in the assembly of packaging machinery, part of the work is mass production. This is mainly due to the fact that, under certain conditions, the actual production of a component will exceed the use of the component, and as long as production continues, inventory will continue to increase. In the production cycle, the rate of inventory formation is the difference between productivity and usage.

The assumptions of the economic production volume and the basic economic order quantity are basically the same, that is, only one type of cargo is controlled, the annual demand for the goods, the inventory holding cost, and the ordering cost can be predicted, and the demand in the year is smooth and does not occur. With large fluctuations, the demand ratio is a reasonable constant. Other costs, such as out-of-stock goods, market reaction rates, etc., are negligible. Each batch of goods is received individually. There is no quantity discount. Productivity (p) is greater than the usage rate (u). At this point there are:

(to be continued)