EPQ Explained — Economic Production Quantity & Production Order Quantity

Continue your operations and inventory management learning with this detailed explanation of the Economic Production Quantity (EPQ), also known as the Production Order Quantity (POQ). In this video, Operations University instructor Brent Bolton explains how EPQ is used in manufacturing environments where items are produced internally rather than ordered all at once from a supplier. You’ll learn how EPQ differs from EOQ, the assumptions behind the model, and how production and demand occur simultaneously during a production run. Step-by-step examples walk through calculating EPQ, maximum inventory levels, and total annual costs to help you understand how manufacturers minimize setup and holding costs. 👉 Get Certified (Lean Six Sigma) Watch the full Lean Six Sigma playlist, then complete your certification at OperationsUniversity.org to earn your Lean Six Sigma certificate. 💰 Advance Your Credentials Certification & Pricing = Yellow Belt $99 • Green Belt $499 • Black Belt $899 — or all 3 for $1,199 (save when purchasing together). Employer packages: Bulk enrollments & reporting available. 💡 What You’ll Learn in This Video: • What Economic Production Quantity (EPQ) is • Differences between EPQ and EOQ models • Key assumptions of the EPQ model • How production rate and demand affect inventory • How to calculate EPQ and maximum inventory levels • Step-by-step EPQ calculation examples 📢 Call to Action ✅ Subscribe for more Lean Six Sigma & operations content ✅ Visit OperationsUniversity.org to get certified ✅ Share this video with your manufacturing or supply chain team #LeanSixSigma #EPQ #ProductionOrderQuantity #InventoryManagement #Manufacturing #OperationsManagement #ContinuousImprovement