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Unformatted text preview: to purchase just the right amount of inventory so that there is neither too large of a surplus nor not enough at all. This also helps to cut down on production and transportation costs so that the profit can be maximized. Reasons for a company setting an EOQ for an item would be the time it takes to produce a part of an item and also how in demand it is and how difficult it may be to get. Once a company decides to use an EOQ it is important that they chose a reasonable EOQ. Looking at previous purchases and the inventory turnover can do this. By knowing in advance what will need to be purchased can save a lot of time and money in the end. Krisay, Chelsey MIS 111 Section 5 Page 2 of 2...
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This note was uploaded on 04/07/2009 for the course MIS 002 taught by Professor Patton during the Spring '09 term at University of Arizona- Tucson.
- Spring '09