Question

In: Accounting

Choose a well-known company that uses the EOQ model and how does this company use this...

Choose a well-known company that uses the EOQ model and how does this company use this method to manage their inventory?

Solutions

Expert Solution

WALMART is an american multi national corporation  with hypermarkets , discount departments stores and grocery stores spread accross the globe which efficiently follows the EOQ MODEL.

Walmart’s success in managing its inventory is partly due to the effective implementation of the inventory managemnent. through their model, suppliers access data from the company’s information systems, such as data on current inventory levels and the rate at which certain goods are sold. Suppliers decide when to send additional goods to Walmart, while the company monitors and controls the actual transit of goods from warehouses to the stores. This strategy shifts some of the inventory control activities onto the side of the suppliers

Walmart’s inventory system has the benefit of minimizing delays in the movement of inventory across the supply chain. This benefit is achieved because suppliers can directly access current data about the inventory of their goods at Walmart stores. Another beneficial effect is the minimization of costs in inventory management activity. The company does not need to spend for extra personnel to manage each supplier’s goods. Instead, this financial and human resource expense is directly passed on to Walmart’s suppliers.


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