Evaluation and Optimization of Economic Production Quantity (EPQ) for Inventory Control System Analysis in a Manufacturing Industries

Abstract

This work attempts to evaluate and optimize the economic production quantity (EPQ) for inventory control system with the intention of using decision model to analyze inventory in small and medium scale industries. Economic production quantity inventory management plays a vital role in enhancing customers’ satisfaction among the manufacturing firms. Customers’ satisfaction is crucial since manufacturing firms contribute greatly to the economic development of a country. In this study, relevant articles were reviewed on inventory management. From the from the case study company (Evepon Nigeria limited), inventory control models obtain the economic production quantity values of inventory control system of the following results were obtained for the manufacturing industry’s production analysis and inventory control system for product 1 (plastic pipe product). The analysis gave an economic production quantity of 3318.56 units, reordering point of 812.17 units, lead time of 4.62 hours and production rate of 4221.59 units. The results reveal a standard system for inventory control and production planning of the case study company. They also provide company standard for similar case studies in order to eliminate and/or reduce the problems associated with inventory duction planning. The techniques applied will help manufacturing industries in case study company to reduce running cost (operating costs and inventory costs), effective utilization of inventory control system and in appraisal of their system.