Economic Production Quantity


The Economic production quantity concept is designed to help inventory managers and practitioners better understand the benefits of maintaining the right amount of inventory.

Technique Overview

Economic Production Quantity Definition

The economic production quantity (EPQ) model is used to determine the optimal order quantity that an organisation should place with a supplier to minimise inventory costs, while balancing inventory holding and average fixed order costs (Dolgui et al., 2010).

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Business Evidence

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Business Application

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Further Reading

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Economic Production Quantity References (4 of up to 20) *

  • Billington, C., Callioni, G., Crane, B., Ruark, J.D., Rapp, J.U., White, T. and Willems, S.P. (2004) Accelerating the Profitability of Hewlett-Packard's Supply Chains. Interfaces, Vol. 34(1), pp. 59-72.
  • Biskup, D., Simons, D. and Jahnke, H. (2003) The Effect of Capital Lockup and Customer Trade Credits on the Optimal Lot Size: A Confirmation of the EPQ. Computers and Operations Research, Vol. 30(10), pp. 1509-1524.
  • Bixby, A., Downs, B. and Self, M. (2006) A Scheduling and Capable-to-promise Application for Swift & Company. Interfaces, Vol. 36(1), pp. 69-86.
  • Brigham, E.F. and Ehrhardt, M.C. (2008) Financial Management. Thomson South-Western: Mason, OH.

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