Sustainable Energy and Inventory Efficiency Optimization: Implementing EOQ Strategy

Abstract

Production represents a fundamental activity within an organization, culminating in the generation of goods or services over a given period. This outcome is then recognized as the organization’s value addition. A critical element of production is the management of raw material inventories. Accurate forecasting of these inventories is essential to preemptively manage potential shortages or excesses, which could lead to production inefficiencies. It is vital for all businesses, particularly those in the manufacturing sector, to work closely with their suppliers to secure a consistent supply of raw materials. Keeping raw material inventory at an optimal level is paramount; insufficient stock can halt production, resulting in lower sales and customer dissatisfaction. This situation adversely affects a company’s profitability and diminishes consumer confidence. Inventory’s primary function within a system is to ensure a smooth process in meeting product demand according to consumer needs, thereby allowing the system to achieve peak efficiency. Moreover, adept inventory management aids in curtailing production costs for a company.