The Economic Order Quantity in Electronics Contract Manufacturing

Submitted by Jan Keijzer on
  • This White Paper is about the Economic Order Quantity (EOQ) in Electronics Contract Manufacturing; a very different type of EOQ. Because its impact is often surprisingly much greater than that of the classic EOQ, much more attention should be paid to the electronics manufacturing EOQ.

    The electronics manufacturing EOQ is defined by Electronics Contract Manufacturers when they receive a request for quotation (RFQ) from their customers (OEMs). This has nothing to do with the classic definition of EOQ. The classic EOQ definition states that the most economical order quantity minimises the total costs of product inventory (holding costs, order costs and shortage costs, etc.). The electronics manufacturing EOQ is about materials minimum order quantities (MOQs), job sizes and residual material costs.

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