Illustration of the two main types of errors. Due to use of the economic order quantity (EOQ) as a tool for process planning Designed to allow discussion in class, start with a consideration of a common type of error, error in calculating the EOQ volume through the use of erroneous data for the input parameters of the formula. The analysis can then move to a general discussion of the second type of error, the incorrect application of EOQ and re-order point (ROP) techniques … Read more »

Illustration of the two main types of errors. Due to use of the economic order quantity (EOQ) as a tool for process planning Designed to allow discussion in class, start with a consideration of a common type of error, error in calculating the EOQ volume through the use of erroneous data for the input parameters of the formula. The analysis can then be a general discussion of the second type of error, the incorrect application of EOQ and re-order point (ROP) techniques to move a particular system. Class discussion with students recommendations of alternative techniques that may be better suited to the operation Blanchard as the EOQ / ROP process can complete.
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from
Paul W. Marshall,
Alan H. Drinan
Source: Harvard Business School
11 pages.
Release date: 01 September, 1972. Prod #: 673033-PDF-ENG
Blanchard Importing and Distribution Co., Inc. HBR case solution