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Book Chapter: Modelling the out-of-stock risk and the EOQ-JIT cost indifference point
Title | Modelling the out-of-stock risk and the EOQ-JIT cost indifference point |
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Authors | |
Keywords | Cost indifference point EOQ JIT Out-of-stock Risk |
Issue Date | 2010 |
Citation | Modelling the out-of-stock risk and the EOQ-JIT cost indifference point. In Wu, Desheng Dash (Ed.), Modeling Risk Management in Sustainable Construction, p. 11-17. Germany: Springer, 2010 How to Cite? |
Abstract | The most important advantage of an economic order quantity (EOQ) system is its ability to handle the unexpected demand. A model for comparing the inventory costs of purchasing under the EOQ system and the just-in-time (JIT) order purchasing system in existing literature concluded that JIT purchasing was virtually always the preferable inventory ordering system. By expanding the classical EOQ model, taking into account out-of-stock risk, which was not considered by previous researchers, this paper shows that it is possible for an EOQ system to be more cost effective than a JIT system when the out-of-stock risk associated with the JIT purchasing system is high or the annual demand is either too low or too high. |
Persistent Identifier | http://hdl.handle.net/10722/127992 |
DC Field | Value | Language |
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dc.contributor.author | Wu, M | en_HK |
dc.date.accessioned | 2010-10-31T13:58:39Z | - |
dc.date.available | 2010-10-31T13:58:39Z | - |
dc.date.issued | 2010 | en_HK |
dc.identifier.citation | Modelling the out-of-stock risk and the EOQ-JIT cost indifference point. In Wu, Desheng Dash (Ed.), Modeling Risk Management in Sustainable Construction, p. 11-17. Germany: Springer, 2010 | - |
dc.identifier.uri | http://hdl.handle.net/10722/127992 | - |
dc.description.abstract | The most important advantage of an economic order quantity (EOQ) system is its ability to handle the unexpected demand. A model for comparing the inventory costs of purchasing under the EOQ system and the just-in-time (JIT) order purchasing system in existing literature concluded that JIT purchasing was virtually always the preferable inventory ordering system. By expanding the classical EOQ model, taking into account out-of-stock risk, which was not considered by previous researchers, this paper shows that it is possible for an EOQ system to be more cost effective than a JIT system when the out-of-stock risk associated with the JIT purchasing system is high or the annual demand is either too low or too high. | - |
dc.language | eng | en_HK |
dc.subject | Cost indifference point | - |
dc.subject | EOQ | - |
dc.subject | JIT | - |
dc.subject | Out-of-stock | - |
dc.subject | Risk | - |
dc.title | Modelling the out-of-stock risk and the EOQ-JIT cost indifference point | en_HK |
dc.type | Book_Chapter | en_HK |
dc.identifier.email | Wu, M: minwu@hkucc.hku.hk | en_HK |
dc.identifier.hkuros | 172470 | en_HK |
dc.identifier.spage | 11 | - |
dc.identifier.epage | 17 | - |