The Study of the Order Quantity Cost Saving of a Local Retail Store by EOQ Method: A Case Study of "Lan Kathum Krub"

Authors

  • Thobordin Sangsawang Business Engineering, Mechanical Engineering, Faculty of Engineering and Industrial Technology, Silpakorn University
  • Nattida Chalorsap Business Engineering, Mechanical Engineering, Faculty of Engineering and Industrial Technology, Silpakorn University
  • Sunisa Chomchit Business Engineering, Mechanical Engineering, Faculty of Engineering and Industrial Technology, Silpakorn University
  • Teerachai Surachotivet Business Engineering, Mechanical Engineering, Faculty of Engineering and Industrial Technology, Silpakorn University

Keywords:

Economic Order Quantity, Cost Reduction, Local Retail Store

Abstract

This paper is the study of the economic order quantity of the "Lan Kathum Krub " shop. The objective of this study is to analyze the economic order quantity (EOQ) to reduce the ordering cost and the duration of the order. The data is collected from January, 1st,-2018 to December, 31st,-2018. The theory of ABC Analysis is applied to classify products into  three group; A, B and C by accumulated value. It is found that Group - A has 62 products, which accounted for 18.90% of the total product types and the product value is 2,205,759 baht, 80.05% of the total product cost,. Group - B has 68 products, which accounted for 20.73% of the total product types and the product value is 277,312 baht, 10.06% of the total product cost,. Group - C has 198 products, which accounted for 60.37% of the total product types and the product value was 272,245 baht, 9.88% of the total product cost. The products in Group – A are stud

y with EOQ analysis and found the keeping cost has been reduced by 8,162.12 baht per year. The ordering cost has been reduced by 2,680.03 baht per year. And a number of orders from the normal 2,528 time per year, when EOQ method is used to make the remaining orders 2,234 time per year, Number of orders has been reduced by 294 time per year.

References

Banthao J., (2016). Inventory Management of Drugs and Medical Supplies: A Case Study of Community Hospital in Nakhon Ratchasima. Faculty of Engineering and Architecture. Rajamangala University of Technology Isan Nakhon Ratchasima.

Diana L., Francisco A., Soumaya Y. & Ada A. (2017). A multi-start algorithm to design a multi-class classifier for a multi-criteria ABC inventory classification problem. From Expert systems with application, 81(1), 12 – 21.

Dissorn A., The Federation of Thai Industries. Inventory Management. Form Inventory Management Books 2013 2nd Edition.

Greedisgoods., (2020). Economic Order Quantity. Retrievedfromhttps://greedisgoods.com/eoq%E0%B8%84%E0%B8%B7%E0%B8%AD/

GSB. (2020). Trade Analysis Unit Sectoral Economy Business and Foundation Economy Research Center. Industry Update. Retrieved from https://www.gsb.or.th/getattachment/da1ab107-c10e-4b89-8b4a6d8de53a5c5c/IN_trade_5_60_detail.aspx.

Heizer J, and Render B. (2018). Operations Management. Pearson Education, Inc., 368.

Homsri P. and Kongthana Ch. (2014). Development of Inventory Management Systems: A Case Study Involving the Installation and Maintenance of Machines for SMEs. Industrial Technology Lampang Rajabhat University Journal, 7(2), 42 – 46.

Jaisamer R. and Changuntabut Ch. (2016). The Applying ABC Analysis for Efficiency Improvement of Inventory Management in Frozen Vegetable and Fruit Factory in Chiang Mai Province. National academic conference and research presentation 1st academic capital "Interdisciplinary Education Combines Thai culture Step confidently into the AC ", 639 - 655.

Lertluck L. (2020). Adaptation of groceries under the age of globalization. Retrieved from https://prezi.com/pj-2cge9aclh/presentation/.

Logistics. (2020). Inventory Management. Retrieved from https://www.myaccount-cloud.com/ Article/De tail/89139.

Mapong K., (2014). Simulation Study to Determine Purchasing Methods to Reduce Drug Inventory Total Cost: A Case Study at Warinchamrab Hospital. Journal Of Health Science, 23(6), 1078 – 1086.

Panyorattaroj S. (2017). Economic Order Quantity Determination for Raw Material: A Case Study of Electrical Spare Parts and Electrical Equipment Product Company. Retrieved from http://research.rpu.ac.th/wpcontent/uploads/2017/08/Supatsara-Panyorattaroj_2559.pdf.

Phalika K. and Suwannasap N. (2016). Inventory Management by Applying The Theory Of ABC Classification Analysis, EOQ Model TechniQues and Silver-Method: A Case Study Of XYZ. Phranakhon Rajabhat Research Journal (Humanities and Social Sciences), 11(1), 102 – 114.

Phiphithipitak T. and Trangwiwipak N. (2014). Inventory Management System Case Study: PN Stainless Steel Shop. Department of Statistical Department Faculty of Science Statistics Silpakorn University.

Rangsitthakhun Ch., (2017). Improvement of inventory management efficiency: case study of Sunshine paper box Co., Ltd. Graduate School Journal, 5(2), 79 – 85.

Suwanasingha N. and Champhat S. (2009). Inventory management system in the store NPT.CAR ACCESSORIES by ABC ANALYSIS and the appropriate order quantity (EOQ). Department of Statistical Department Faculty of Science Statistics Silpakorn University.

Somdej. (2014). Problems in accounting and taxation of inventories. From Report of goods and raw materials. 10th edition, Bangkok: Thammanitpress 2014.

Worldpanel K., (2020). Market share of hypermarkets. Retrieved from https://www.pra chachat.net/marketing/news-137343

Downloads

Published

2022-01-02

How to Cite

Sangsawang , T. ., Chalorsap, N. ., Chomchit, . S. ., & Surachotivet, T. (2022). The Study of the Order Quantity Cost Saving of a Local Retail Store by EOQ Method: A Case Study of "Lan Kathum Krub". Modern Management Journal, 19(2), 132–143. Retrieved from https://so04.tci-thaijo.org/index.php/stou-sms-pr/article/view/249256

Issue

Vol. 19 No. 2 (2021): ๋July - December 2021

Section

Research Articles

License

Copyright (c) 2022 Modern Management Journal

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.