Factors affecting Economic Production Quantity (EPQ) at traditional red brick kilns of North Sindh

Abstract

Objective of the research article is to find optimum brick lot size that is to be manufactured at kiln in a cycle (chakar) , to find bhelli (inferior) brick production level, to find best way to produce (by either rule of the thumb production or EPQ production), to find reasons of unwanted stoppage of kiln production, how to manage seasonal production, how to cut cost per brick, how to get quality of production, how to get economies of scale at kilns, and how to find optimal product mix.

EPQ is followed to avoid unnecessary blockage of funds and excess storage costs. It is to find sweet spot where setup cost (ordering cost) is balanced against holding costs. There are two costs associated with inventory at kiln. Ordering cost is cost of putting an order. Average order size is 5000 bricks per trolley. Holding cost tells about carrying costs to hold brick inventory for some time at kiln.

Sample includes random 90 kilns. Research is applied, with questionnaire form and survey technique used. There are many districts of the North Sindh. But for this research only three districts are chosen i.e. Khairpur, Sukkur, and Larkana. North Sindh traditional kilns are divided into three categories by scholar based on production level, infrastructure, land area and annual operating time i.e. small, medium and large kilns.

Average cycle/chakar production is 68952, 461726 and 488767 bricks for small, medium and large kilns. But EPQ is 169286, 756556 and 630234 bricks per batch /cycle for small, medium and large kiln. It is suggested that 1.5, 0.7 and 0.31 times production per cycle should be increased to meet potential production level at small, medium and large kilns.