EOQ Adjustments


A variety of special situations can occur that will require adjustments to basic EOQ model. Some of them are:

  • Production lot size (most economical quantity from manufacturing perspective)
  • Multiple item purchase.

This describes situations when more than one product is bought concurrently, so that quantity and transportation discounts must consider the impact of the product combinations.

  • Limited capital (limited capital – budget limitations for total inventory investment)
  • Private trucking (influences order quantity since it represent a fixed cost once the decision is made to replenish the product.)

If the enterprise decides to use its own truck, it should fill the truck regardless of the value calculated by the EOQ. Transporting a half empty truck does not make any sense.

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