Case Study: SMC: Managing with Economic Order Quantity
This two-part case study illustrates the use of economic order quantity to manage conflicting performance measures across different silo'd functions in an organization. Part A requires students to assess the costs of various order quantities and quantify the concept of "robustness." Part B emphasizes managing the variables of annual demand, ordering cost, inventory carrying cost, and unit price to achieve strategic goals. The student must determine how to lower ordering costs to compensate for increases in the other variables as well as to help guide Just-In-Time implementation efforts.
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