An alternative analysis of inventory costs of JIT and EOQ purchasing

Abstract

Recent models comparing inventory costs under just‐in‐time (JIT) purchasing plans and economic order quantity (EOQ) purchasing plans have tended to favor EOQ purchasing in situations where annual demand of inventory is moderately large. Contends that these cost models are lacking dynamic cost components inherent in virtually all JIT purchasing plans. Presents a series of inventory purchasing cost models that extend prior methodology by Fazel by including relevant physical distribution cost savings. Additional comparative models are presented to further demonstrate how other relevant costs factors can be included in a comparative EOQ/JIT model. A cost comparison with an existing problem from the literature is used to illustrate the informational efficacy of new models.

Citation

Schniederjans, M.J. and Cao, Q. (2001), "An alternative analysis of inventory costs of JIT and EOQ purchasing", International Journal of Physical Distribution & Logistics Management, Vol. 31 No. 2, pp. 109-123. https://doi.org/10.1108/09600030110387507