Operations
Manager
EOQPROD Overview
EOQ
for production lot sizes (EOQPROD)
 Alvin
Air Systems in Alvin
,
Texas
,
produces repair and maintenance items for commercial air conditioning
systems.
Alvin cannot use the standard EOQ for determining production lot
sizes. One problem is
that the standard EOQ assumes that an order quantity or lot of material
is received all at once. At
Alvin
,
most production lots take some time to complete and parts are placed
in stock on a daily basis until the run is over.
A related problem is that substantial sales usually occur
before the run is over. To
solve these problems, Alvin
uses
the modified EOQ model for production lot sizes.
Why? The EOQ
must be larger than maximum investment to account for sales made
during the production run.
Vendors sometimes
offer several different price/quantity plans, so EOQDISC is set
up to evaluate four discount plans at once.
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