USING EOQ TO ESTIMATE THE OPTIMIZE YOUR FOOD AND BEVERAGE STORAGE IN HOME

In the big company, inventory management uses EOQ to calculate the most economic quantity of order. The purposes are to know the optimum order with the lowest cost parameter. There are three main basic components to calculate EOQ such as re-ordering cost, demand, and holding cost.

EOQ also can use in the daily activity to calculate of consumer good storage in home. In the daily life, everyone must keep something in home to store vegetables, meats, fruits, milk, book, bath equipments, and other consumer goods. To store everything, people usually don’t consider about the optimal time, size, and quantity when they buy something to stock in home. For example, how much mother should buy milk for her children in the market. This example will be calculate later.

The first component is re-ordering cost (RC). The definition of re-order cost is total expenses involved in repeating supply such as order preparation, communications, transportation, inspection, administration, and other costs. For example, the distance from house to market is 20 km. Assume that the car’s consuming is 10 km per litre and gasoline price is $1 per litre. Therefore, the re-ordering cost is 2 x 20 / 10 x $1 = $4 (the calculation is for 2 ways, go to the market and go home).

The second component is demand (D). Demand in EOQ is define as the estimate of consume or how much the product will be sold in a year. For example, the children can consume 8 cans of milk in a month. Hence the demand is 8 x 12 = 96 bottles annually.

The second component is holding cost or storage cost (HC). It can be defined as expenses involved in keeping and maintain a stock. It is including rent of space, equipment, materials, labour, insurance, security, interest, and other direct expenses. For example, a $200 locker can store 10 cans of milk. It estimates that have a reliability age 10 years. Therefore, we can calculate the holding cost as $50/10/10 = $2 per can annually.

The calculation of EOQ for this example is EOQ = (2xRCxD/HC)^0.5 = (2 x 4 x 96 /2)^0.5 = 19.6 ~ 20 cans. It means that each order or buy is 20 cans of milk. Moreover, the calculation of total annual inventory cost is VC = (RCxD/EOQ) + (HC*EOQ/2) = (4x96/19.6) + (2x19.6/2) = 19.6 + 19.6 = $39.2. In addition, the time between order is 360/5 = 72 days (around 2.4 months).

By this calculation, each family is able to calculate the most optimal storage of daily consumer goods. In this example if the mother buys 15 cans every purchase (below EOQ), the total annual inventory cost will be VC = (RCxD/Q) + HC*Q/2 = (4x96/15) + (2x15/2) = 25.6 + 15 = $40.6. It will be the same if the mother buys 25 cans every purchase (above EOQ), the total annual inventory cost will be VC = (RCxD/Q) + HC*Q/2 = (4x96/25) + (2x25/2) = 15.36 + 25 = $40.36.

For conclusion, each family can save money with EOQ calculation in daily life.

INDUSTRIAL AUTOMATION'S DILEMMA IN THE MODERN TECHNOLOGY AGE

In the manufacturing industry, factory needs a good performance in the line of production. Good performance means good pace, high rate of productivity, high percentage of efficiency, small number of defect product, minimize number of rework, uniform measurement, standard process, and etc. Therefore, people develop machinery to meet those all requirements.

In the beginning of Technology Age, people developed simple machine to help and improve the process manufacturing line to reach productivity and quality. Industrial Revolution in England was able to open mindset of people in the world that people need some tools to make this life easier. People raced to invent a new product to provide better and easier living.

In the modern technology age, machinery grows very fast. Production processes are control by technologically elements like button, switch, driver, valve, motor, and etc. All control elements will be organized in one brain called PLC (Programmable Logic Controller) and programmable computer. In addition, automation industries are growing fast in developing pneumatic machine, electric machine, electropneumatic machine, hydraulic machine, mechatronics machine, robotics, and computerize elements. These tools are very simple and fast to use in the production line. For example, if factory want to produce certain color and quantity, the operator only need push some button and input number in the controller.

Industrial Automation brings a lot of alteration in the manufacturing world. With some machine, factory only need some operator to operate the machine. In the old manufacturing, factory requires a lot of people to do the cycle of production. For example cutting material from metal, factory only needs one CNC machine operator, one draftsman, and some helpers. If this job works manually, factory needs more people to do the same job with the same time of production. The quality of machine usually is better than manual work because machine can work more precise and constant than manually work. This factor perhaps becomes consideration of company to invest machines than workers.

This trend does not only happen in the manufacturing, but also in the public services field like transportation. For example, if in the old time bus company use two workers (one as a driver and one as assistant to a driver); now company use only one workers (driver) because bus company use RFID (Radio Frequency Identification) technology and one chip inside a smart card that brings by each passenger. In the future, industrial automation will be growth. All fields will manage like robot. The people’s jobs will change with automation elements and machines. For example, bus and train conductor change into RFID, bus and train driver change into automatic bus and train, traffic police change into CCTV (Close-Circuit Television) camera, Parker change into automatic security parking, bank teller and officer change into ATM (Automated Teller Machine), cashier change into self-service machine, tollgate officer change into ERP (Electronic Road Pricing) gate and etc.

In conclusion, the benefit of Industrial Automation will become dilemma in the modern technology age. Unemployment will be higher in the future because all jobs of people will be change by technology. On the other hand, company needs all the best to provide high quality of products and services; although they need to invest money for technology. In one side, automation technology gives benefit to all people. On the other side, it needs alertness of human.

IS VALENTINE’S DAY A BUSINESS STRATEGY?

Most of people in the world concurrently celebrate Valentine’s Day on February 14th although no one country publishes that in that day is a national holiday. People said that the history of Valentine’s Day is to celebrate St. Valentine’s Day, a martyr from Roman Catholic Church. It is slightly confusing; because based on The Catholic Encyclopaedia (1908), the name of Valentine refers to three names of martyrs or saints. However, people believe that Valentine’s Day is come from the name of St. Valentine of Rome, a priest, a candidate of bishop in 143.

History of Valentine’s Day

Shortly, Valentine is a name of Roman Catholic priest who refused to leave his religion when Roman Emperor Claudius II led. In that era, the Roman Emperor had been ambition to build huge military soldiers, but men did not want to join because they did not want to leave his wife and family. Roman Emperor was so angry and he commanded to forbid marriage in his region. Someday, he gave married blessing to a couple. He was captured and jailed. Then, many people visited him including jail guard’s daughter who can increase his spirit. Before his head cut-off in 14 February 269AD, he was able to write a message to the girl about her care, support and help during in jail. The end of the message, he wrote: “With Love from Your Valentine”.

Over the centuries, February 14th was signed as Valentine’s Day the symbol of Love Day in the world. People send gift-giving and handmade cards every year in that day. Miss Esther Howland note as the first person who send the first valentine’s card in the 1840s. After this day, Valentine’s Day become a great moment and event in the world until today especially adolescents.

Business in Valentine’s Day

After 1840s, Valentine’s Day became popular. Miss Esther Howland was able to start her business of mass-production valentine’s cards. This is a good business strategy that she made. Yearly, this business grows not only valentine’s card, but also chocolate, flower, confectionery, candy, doll, and accessories. Businessman and company use the moment of valentine to sell their product.

Before Valentine’s Day, the types of business like chocolate, flower, confectionery, candy, restaurant, cafe, bar, super mal, post, package, doll, and accessories usually get a higher demand. Businessman and company should well prepare to get high profit during this moment. Good planning and marketing is the key of success in this moment.

The U.S. Greeting Card Association estimates those approximately one billion valentines are sent each year worldwide, making the day the second largest card-sending holiday of the year, behind Christmas. The association estimates that, in the US, men spend in average twice as much money as women. However, greeting card companies should make another strategy because technology growth fast. People begin change from greeting card by post into electronic card by internet.

The first time, Valentine’s Day was not a business strategy. But businessman and company use the moment of Valentine’s Day to make a business strategy to grow their market and demand.