EOQ
EOQ (Economic Order Quantity) is a widely used method in supply chain management that helps companies decide how much of a product to order at one time. Think of it as a smart shopping calculator that balances the costs of ordering too much (storage costs) versus ordering too frequently (shipping and handling costs). Just like a family might buy in bulk to save money but not so much that food spoils, businesses use EOQ to make similar decisions but on a larger scale. This method is part of inventory management and is often mentioned alongside terms like 'inventory optimization' or 'cost reduction strategies.'
Examples in Resumes
Implemented EOQ model resulting in 30% reduction in inventory holding costs
Used EOQ and Economic Order Quantity analysis to optimize warehouse operations
Trained warehouse staff on EOQ principles and inventory management best practices
Typical job title: "Supply Chain Analysts"
Also try searching for:
Where to Find Supply Chain Analysts
Professional Associations
Online Communities
Job Resources
Example Interview Questions
Senior Level Questions
Q: How would you implement EOQ in a company that has never used it before?
Expected Answer: A senior candidate should discuss change management, team training needs, data requirements, and how to phase in implementation. They should mention potential challenges and how to overcome them.
Q: How do you adjust EOQ calculations when dealing with seasonal products?
Expected Answer: Should explain how to modify basic EOQ for seasonal variations, including adjusting for peak periods, considering storage limitations, and balancing costs with seasonal demand patterns.
Mid Level Questions
Q: What factors might cause you to deviate from the EOQ calculation?
Expected Answer: Should mention practical considerations like supplier minimum order quantities, storage space limitations, product shelf life, and budget constraints.
Q: How do you calculate EOQ and what information do you need?
Expected Answer: Should be able to explain the basic formula in simple terms and list required information: annual demand, ordering costs, and holding costs.
Junior Level Questions
Q: What is EOQ and why is it important?
Expected Answer: Should explain that EOQ helps find the best order quantity to minimize costs and describe basic benefits like reduced inventory costs and improved efficiency.
Q: What are the main costs considered in EOQ?
Expected Answer: Should identify ordering costs (shipping, handling) and holding costs (storage, insurance) as the main components.
Experience Level Indicators
Junior (0-2 years)
- Basic inventory management concepts
- Understanding of EOQ calculations
- Microsoft Excel proficiency
- Basic data analysis
Mid (2-5 years)
- Advanced inventory optimization
- Supply chain software experience
- Cost analysis and reduction
- Vendor management
Senior (5+ years)
- Strategic inventory planning
- Team leadership
- Supply chain optimization
- Project management
Red Flags to Watch For
- No understanding of basic inventory management principles
- Cannot explain the relationship between ordering costs and holding costs
- Lack of experience with inventory management software
- No knowledge of practical limitations of theoretical models
Related Terms
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