INVENTORY MANAGEMENT ACCORDING TO EOQ CONCEPT: A CASE OF TOZEN INDUSTRIAL CO., LTD

Warisa  Charoensuk; Sawai  Siritongthaworn; Pongrapee  Kaewsaiha; Phuphas  Paphanaphaphum; Ruedee  Niyomrath; Aran  Kwanpan; Thammarak  Srimarut

Warisa Charoensuk Suan Sunandha Rajabhat University
Sawai Siritongthaworn Suan Sunandha Rajabhat University
Pongrapee Kaewsaiha Suan Sunandha Rajabhat University
Phuphas Paphanaphaphum Suan Sunandha Rajabhat University
Ruedee Niyomrath Suan Sunandha Rajabhat University
Aran Kwanpan Suan Sunandha Rajabhat University
Thammarak Srimarut Suan Sunandha Rajabhat University

Keywords: Inventory, Economic order quantity, Flexible coupling

Abstract

The objective of this research was to analyze for the economic order quantity (EOQ) of
rubber flexible coupling, which was the product with the highest annual demand, of Tozen
Industrial Company Limited by using historical inventory data for 1 year. The group of
informants consisted of 1) a factory manager, 2) a sales staff, 3) two warehouse staff, and 4) a
purchasing staff. The research methods included 1) studying the existing inventory
management information, and 2) analyzing for EOQ. After analyzing the rubber flexible
coupling inventories for EOQ, it was found that the ordering cost, inventory carrying cost,
EOQ, and the number of economic orders per year were 399 Baht/time, 4,322 Baht/unit/year,
10.99 unit/ order, and 59.51 orders/ year, respectively. The inventory costs of those in the
existing inventory management environment were 175,355 Baht, while those under the EOQ
condition were totally equal to 47,495 Baht, accounting for 72.91 percent cost reduction if such
an EOQ concept was pursued