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    • No – it is different than JIT.

      There are two main reasons. One is that EBQ assumes that we order in fixed quantities at fixed intervals, whereas JIT assumes that we order as needed. Second it that the main focus of JIT is on quality and the costs involved with quality are impossible to quantify.

    • If you are happy with differentiation then it is fairly easy to derive the formula for the EBQ and for the average inventory.
      However deriving it is excluded from the syllabus (and will take too long to type out on here).
      The derivation might be in some of the approved study texts (although probably not because it is not in the syllabus).

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      • wrt EOQ formula even with out differenciation i could derive.
        @ EOQ HOLDING COST = ORDERING COST
        AVG INVENTORY*HC PER UNIT PER ANNUM = NO.OF ORDERS * OC
        EOQ/2 * HC= DD/EOQ *OC
        EOQ* EOQ=2 *DD*OC/HC
        EOQ=ROOT OF 2*DD*OC/HC

        LYK THIS CANT WE DERIVE EBQ. FOR ME THE DOUBT IS WAT SHOULD BE AVD INVENTORY IN EBQ SCENARIO?

      • This is not a derivation of the equation – it is assuming that total holding cost will equal total order cost at the optimum. Although this is the case, you have not proved it!

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