Economic Order Quantity Mode Research For Land Rover Motor Parts

The market of car parts in our country could be divided into two systems. One is entire car parts system, the other is after service system. Along with the increase of the car output, the number of entire car parts increases. Along with the increase of car inventory, the need of car part after service is considerable. Till 2007, the car inventory in our country has been increased up to 51.8 million and it is expected to increase to over 100 million in 2015. This means the scale of car after service in China is growing quickly.Along with the increase of car sales, the inventory of cars in China is increasing which predicts a bright future of its after service. In 2005, the entire after service market has an annual turnover of 67.4 billion and it is expected to reach to 154.2 billion in 2010. The after service of car parts has a huge potential opportunity.Currently most of car parts companies have a common question -How to effectively satisfy customers' needs and minimize the cost? Therefore, again, the issue of inventory and purchasing become a hot topic in academic world. Facing the rapidly increasing of market needs, we need to use Economic Order Quantity to realize the management of inventory.Firstly, this article analyzes the potential needs and the feature of these needs in car parts market. Then, it explains the sale traits of current car parts companies and the typical method to resolve the issue of inventory and purchasing—Economic Order Quantity. Through EOQ, companies could minimize the cost of inventory and purchasing. This article offered a case which successfully resolved a practical problem by using EOQ.