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Estimating Costs in the EOQ Formula

  • Pilar I. Vidal-CarrerasEmail author
  • Jose P. Garcia-Sabater
  • Maria Valero-Herrero
  • Cristina Santandreu-Mascarell
Conference paper
Part of the Lecture Notes in Management and Industrial Engineering book series (LNMIE)

Abstract

The EOQ formula (Harris, Fact Mag Manage 10(2):135-6-152, 1913) provides a balance between setup costs and holding costs in the system. This formula has been widely developed in the literature. However in the industrial reality, it is often difficult to know the exact value of these setup and holding costs. In this paper, we develop a formula to estimate lot size from the values known in the company. It is verified that the behavior of these formulas meets expectations.

Keywords

EOQ Inventory management Setup cost Holding cost 

Notes

Acknowledgments

The work described in this paper has been supported by Project “CORSARI MAGIC DPI2010-18243” from the Spanish Ministry of Science and Innovation.

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Copyright information

© Springer International Publishing Switzerland 2014

Authors and Affiliations

  • Pilar I. Vidal-Carreras
    • 1
    Email author
  • Jose P. Garcia-Sabater
    • 1
  • Maria Valero-Herrero
    • 2
  • Cristina Santandreu-Mascarell
    • 3
  1. 1.Grupo ROGLE. Dpto. de Organización de EmpresasUniversidad Politécnica de ValenciaValenciaSpain
  2. 2.Dpto. de Organización de EmpresasUniversidad Politécnica de ValenciaValenciaSpain
  3. 3.IGIC. Dpto. de Organización de EmpresasUniversidad Politécnica de ValenciaValenciaSpain

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