In this keynote video we will show how to apply the Quantity Discount Model.
To determine the optimal order size (at which the sum of the total inventory and ordering costs is minimal), we apply the Economic Order Quantity (EOQ) model. This model assumes that the purchasing costs are constant. In case however we are dealing with quantity discounts, we need to apply the Quantity Discount Model (QDM) instead.
00:00 - Start Keynote
00:30 - Objectives of the QDM Model
01:25 - (1) QDM Process Setup
01:53 - (2) Evaluate Inventory Costs
02:08 - (3) Determine Economic Order Quantities
02:40 - (4) Check Feasibility of EOQ’s
03:24 - (5) Evaluate Total Annual Costs
03:51 - (6) QDM Process Completion
04:03 - Graphical Analysis
