Operations Management

Routing refers to the process of initiating production according to a predefined plan, ensuring that the materials and tasks are directed along the right path to complete the production efficiently.

The Pareto principle, also known as the 80/20 rule, is often applied to inventory management, where 20% of items contribute to 80% of the value or sales. This principle helps prioritize inventory management efforts.

Economic Order Quantity (EOQ) is determined using the annual demand, ordering cost, and carrying cost. The profit margin is not a factor in calculating EOQ.