Developing a Methodology to Create a Supplier Minimum Order Quantity Model for a Food Service Company
Open Access
Author:
Semmer, Julia
Area of Honors:
Supply Chain and Information Systems
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
Robert Alexander Novack, Thesis Supervisor John C Spychalski, Thesis Honors Advisor
Keywords:
Minimum Order Quantity Economic Order Quantity
Abstract:
Minimum Order Quantities (MOQs) are frequently set by suppliers to cover their production costs and ensure that they make a profit. This thesis explores adopting a minimum order quantity system to dictate the quantity purchased by companies. This thesis explains the development of a minimum order quantity model for a large supply chain logistics company, Company A, to find optimal order quantities for each product. Data was provided by Company A and was used to build a model that has the goal of recommending a specific minimum order quantity to send to Company A’s customers. However, data was not sufficient to fully develop a workable MOQ model. Instead, an Economic Order Quantity (EOQ) model was developed to make a recommendation for Company A. This analysis shows the quantity that should be ordered to achieve the lowest costs. The results of the EOQ model show the cost savings that can be achieved. The takeaway from this model show that shipping larger quantities of products more frequently can result in cost savings for companies like Company A.
