Guideline for Reducing Total Inventory Cost by Finding the Economic Order Quantity A Case Study: Convenience Stores in Nakhon Pathom Province

Abstract

This research is a guideline for reducing total inventory cost by finding the economic order quantity, case study of convenience stores in Nakhon Pathom province. This research aims to 1) to find the economic order quantity for product group A only. 2) to reduce the total inventory cost per year. The researcher used secondary data from the stores, which is data from January to December 2023, such as purchase information, sales information, expense information, salary information, product information, etc. This research has research methodology is 1) product grouping using ABC analysis theory, 2) finding the ordering cost, 3) finding the economic order quantity, 4) finding the total inventory cost. The results of the research found that 1) there are 945 products in total, 142 of which are product group A. The current order quantity for product group A is 29,440 units, and the order quantity for product group A by applying the EOQ theory is 23,890 units. Therefore, the order quantity exceeds the demand 5,550 units per year. 2) total inventory cost before using EOQ theory is 3,140,501 baht per year (3,234 units per purchase) and total inventory cost after using EOQ theory is 981,485 baht per year (1,250 units per purchase). Therefore, the guideline reducing total inventory cost by finding the economic order quantity, can reduce total inventory costs 2,159,016 baht per year, or 68.75 percent.