* Associate Professor in the, Department of Mechanical Engineering, PEC University of Technology (formerly Punjab Engineering College), Chandigarh-(India)
Online published on 27 February, 2017.
The computation of inventory turnover ratios to optimize the inventory costs by using basic Economic order Quantity (EOQ) model has been presented in this paper. Various inventory related costs have also been computed for ten items of a manufacturing industry. The turnover ratios of these items have been computed for the last four years. The comparison of total variable costs for managing the inventory by using the EOQ has been done with the total cost without EOQ model. The results reveal that there is more than 18% reduction in the total variable costs by using EOQ model.
Turnover ratio, EOQ model, Total variable costs, manufacturing industry
