procurement-optimization

What problem does it solve?

This Skill helps organizations make optimal purchasing decisions by minimizing total costs, allocating orders across suppliers, and determining ideal order quantities, while meeting service levels and constraints.

Core Features & Use Cases

• Economic Order Quantity (EOQ): Calculates optimal order sizes to minimize ordering and holding costs.
• Supplier Allocation: Determines the best way to split orders among multiple suppliers based on cost, capacity, and quality.
• Use Case: A manufacturing company needs to procure raw materials. This Skill can calculate the EOQ for each material and then determine the optimal allocation of the total demand across its approved suppliers to achieve the lowest total cost while ensuring quality and capacity requirements are met.

Quick Start

Use the procurement-optimization skill to calculate the EOQ for an annual demand of 10,000 units, an order cost of $100, and a holding cost rate of 25%.