What is EOD system?

EOD system is very useful in the inventory management to companies that spend a lot of money in the inventory because of the industry the companies are in will incur heavy cost in the inventory. In the previous company that I had worked for is a famous fast food chain; it has frequent demand of foods and consumption production in a large quantity which makes the inventory management of great importance. If the inventory is overcrowded then holding cost will increase but if there is a shortage, then the business activities will suffer. To define how many goods to be purchased, a trade off need to be done between number of goods purchased and number of purchasing times. The EOD could be helpful in providing suggestions on how many goods should be purchased at a time. And what good need to be purchased could also be determined by taking into the consideration of lead time. But the disadvantage of this model in actual application is that demand may changes by time or other factors which make this tool less effective in actual case.

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