A note on the EOQ-JIT relationship

Abstract

Most attempts to reconcile the somewhat antithetical philosophies of economic order quantity (EOQ) and just-in-time (JIT) have focused on the effect of a reduction in setup time and the increase in holding costs. This paper, on the other hand, presents a straightforward mathematical development of the EOQ model that establishes the theoretical basis of JIT. It is shown that the two strategies are consistent when the JIT policy of synchronizing production with demand is achieved.

Notes

EDMOND L. D'OUVILLE, Ph.D., C.P.A., is an Associate Professor of Business Administration at Indiana University Northwest where he has taught since 1970. He received his doctorate from the University of Illinois at Chicago. His current research interests include management accounting and control, the economic theory of traffic congestion, and mathematical inventory models. He has published a number of articles on these subjects in the professional literature.

T. HILLMAN WILLIS, Ph.D., CPIM, CDP is an Associate Professor of Operations Management at Louisiana Tech University in Ruston, Louisiana. His Ph.D. in quantitative methods is from Louisiana State University. He is certified in production and inventory management by APICS and in data processing by the ICCP. His articles have appeared in several professional journals such as Production and Inventory Management Journal, Industrial Engineering, International Journal of Operations and Production Management, Industrial Management, and International Journal of Physical Distribution and Logistics Management. His research interests include manufacturing strategy and logistics management.

C. RICHARD HUSTON is an Associate Professor of Marketing at Louisiana Tech University. He obtained his B.A. at Wabash College and his M.B.A. and D.B.A. degrees at Indiana University. Before joining the Louisiana Tech faculty in 1979, Dr Huston taught at Indiana University Northwest, Memphis State University, Indiana University Fort Wayne, Virginia Tech, and University of Indianapolis. He has published several articles on inventory management and purchasing, and has also done extensive research in the field of consumer behaviour.