BUS307 Week 4 – Discussion Forum 2 Solution


JIT/EOQ/ROP Interrelationships [WLOs: 1, 2] [CLOs: 1, 2, 3, 4, 5]

Prior to beginning work on this discussion forum, read Chapter 11: Managing Inventory Throughout the Supply Chain.


BUS307 Week 4 – Discussion Forum 2 Solution

Using the economic order quantity (EOQ) and reorder point (ROP) formulas, explain how such efforts would be consistent with JIT’s push for lower inventory levels.

  • Maximize their process flexibility so that ordering costs are minimal.
  • Stabilize demand levels.
  • Shrink lead times as much as possible.
  • Assign much higher holding costs to inventory than has traditionally been the case.

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