TY - GEN
T1 - Application of Economic Order Quantity (EOQ) for Make-To-Order (MTO) Business
AU - Parasian, Andreas
AU - Sakti, Hafsha Rasyida
AU - Novarianti, Intan Karunia
AU - Nurcahyo, Rahmat
N1 - Publisher Copyright:
© IEOM Society International.
PY - 2021
Y1 - 2021
N2 - Research about the implementation of the Economic Order Quantity (EOQ) model is mostly done only for implementation in Make-To-Stock (MTS) companies. There has not been much recent research about the implementation of the EOQ model to companies that use make-to-order (MTO) business production strategy. Therefore, by considering the research gap as well as the need of MTO businesses to reduce their costs, the implementation of the EOQ model is applied to PT X, which is an MTO company that produces steel wheel disc. The aim of this research is to discover a better order quantity planning method by comparing the holding cost between PT X’s production system before and after the implementation of the EOQ model. The results of analysis, calculation, and validation of order quantity planning using the EOQ model showed that the implementation of the EOQ model for order quantity planning in PT X can reduce the number of losses caused by holding costs. The research is conducted assuming the supplier is a make-to-stock producer that is capable of meeting production demand with at most 1 week lead time.
AB - Research about the implementation of the Economic Order Quantity (EOQ) model is mostly done only for implementation in Make-To-Stock (MTS) companies. There has not been much recent research about the implementation of the EOQ model to companies that use make-to-order (MTO) business production strategy. Therefore, by considering the research gap as well as the need of MTO businesses to reduce their costs, the implementation of the EOQ model is applied to PT X, which is an MTO company that produces steel wheel disc. The aim of this research is to discover a better order quantity planning method by comparing the holding cost between PT X’s production system before and after the implementation of the EOQ model. The results of analysis, calculation, and validation of order quantity planning using the EOQ model showed that the implementation of the EOQ model for order quantity planning in PT X can reduce the number of losses caused by holding costs. The research is conducted assuming the supplier is a make-to-stock producer that is capable of meeting production demand with at most 1 week lead time.
KW - Economic Order Quantity (EOQ)
KW - Holding cost
KW - Make-To-Order (MTO)
KW - Order Quantity Planning
UR - http://www.scopus.com/inward/record.url?scp=85125949961&partnerID=8YFLogxK
M3 - Conference contribution
AN - SCOPUS:85125949961
SN - 9781792361289
T3 - Proceedings of the International Conference on Industrial Engineering and Operations Management
SP - 256
EP - 267
BT - Proceedings - 2021 IEOM India Conference
A2 - Babu, Shekar
A2 - Shetty, Devdas
A2 - Vasu, V.
A2 - Sharma, R.R.K.
A2 - Ali, Ahad
PB - IEOM Society
T2 - 1st Indian International Conference on Industrial Engineering and Operations Management, IEOM 2021
Y2 - 16 August 2021 through 18 August 2021
ER -