A study on inventory cost reduction based on economic order quantity model

This paper conducts an in-depth analysis of three models derived from economic order quantity (EOQ) model in an effort to reduce high inventory cost associated with the IT commodities sold in one of the Carrefour supermarket outlets. These three models are: 1. model of lots ordered and delivered independently, 2. model of lots ordered and delivered jointly, and 3. model of lots ordered and delivered for a selective subset. Mathematically, these three models are carefully discussed and compared in this paper. The third EOQ-based model contains more selective procedures combining the commodities to be ordered jointly in an order schedule and with that may lead to an optimal solution for its lowest cost.