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EOQ models seem to conflict with the Flow principles.
Models to determine Economic Order Quantity (EOQ) of materials focus on cost reduction, possibly at the expense of other consumer centric measures of availability and freshness. Advocates of the Flow principle often say that EOQ bunches order quantities and results in infrequent supplies and large batches.
Is it possible to make the EOQ models work in line with the Flow principles? Is there a parameter setting which would lead to a single piece flow?
If we look at the EOQ formula, it is evident that ordering cost plays an important role. If we lower the ordering cost, EOQ goes down. What would happen if the ordering cost was zero? It would lead to a single piece flow!
This insight has led to several improved methodologies like Kanban and Vendor Managed Inventory (VMI).
Breaking compromises does indeed lead to better management practices.