EOQ
EOQ (Economic Order Quantity) is a calculation method used in warehouses and supply chain management to determine the best amount of products to order that saves the most money. Think of it like finding the sweet spot between ordering too much (which costs more to store) and ordering too little (which means ordering more frequently and paying more shipping costs). It's a fundamental tool that helps companies make smarter decisions about when and how much to order. You might also see it called "optimal order quantity" or "economic lot size."
Examples in Resumes
Implemented EOQ analysis resulting in 25% reduction in inventory costs
Used Economic Order Quantity calculations to optimize warehouse operations
Trained warehouse staff on EOQ principles and inventory management
Typical job title: "Inventory Managers"
Also try searching for:
Where to Find Inventory Managers
Professional Organizations
Online Communities
Example Interview Questions
Senior Level Questions
Q: How would you implement EOQ across multiple warehouses with different demand patterns?
Expected Answer: Should explain how to adapt EOQ calculations for different locations, considering factors like local storage costs, shipping times, and seasonal demands. Should mention coordination between facilities and use of data analysis.
Q: How do you balance EOQ recommendations with real-world constraints?
Expected Answer: Should discuss practical limitations like budget restrictions, storage space, supplier minimum orders, and perishability. Should explain how to adjust theoretical EOQ numbers to work within these constraints.
Mid Level Questions
Q: What factors affect EOQ calculations?
Expected Answer: Should mention ordering costs, holding costs, demand rate, and lead times. Should be able to explain how changes in these factors impact the final EOQ number.
Q: How do you explain EOQ benefits to stakeholders?
Expected Answer: Should demonstrate ability to translate technical benefits into business terms like cost savings, improved efficiency, and better cash flow. Should provide examples of successful implementations.
Junior Level Questions
Q: What is EOQ and why is it important?
Expected Answer: Should explain that EOQ helps find the most cost-effective order quantity by balancing ordering and storage costs. Should be able to describe basic benefits like reduced costs and improved inventory management.
Q: How do you gather data needed for EOQ calculations?
Expected Answer: Should describe working with accounting for cost data, reviewing historical orders for demand patterns, and consulting warehouse staff for operational details.
Experience Level Indicators
Junior (0-2 years)
- Basic EOQ calculations
- Inventory tracking
- Using inventory management software
- Understanding of storage costs
Mid (2-5 years)
- Advanced inventory analysis
- Multiple supplier management
- Cost optimization strategies
- Demand forecasting
Senior (5+ years)
- Multi-location inventory optimization
- Supply chain strategy development
- Team management
- Advanced analytics and reporting
Red Flags to Watch For
- No understanding of basic inventory management principles
- Cannot explain relationship between ordering costs and holding costs
- Lack of experience with inventory management software
- No knowledge of supply chain operations
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