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Economic order quantity model extensions

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Encyclopedia of Operations Research and Management Science

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The classical EOQ (Economic Order Quantity) model has a long list of assumptions. We begin by assuming that the horizon of the process is infinite and that all parameters stay the same over time. Then the solution to the classical EOQ problem is where the parameters A, D, v, and r are the fixed cost of replenishment in $/ order, (constant) annual demand in units/year, unit cost in $/unit, and carrying charge in $/unit/year, respectively. A typical picture of inventory level over time is displayed in Figure 1.

Fig. 1
figure 1

Classical EOQ model.

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References

  1. Goyal, S.K. (1979). “A Note on the Paper: An Inventory Model with Finite Horizon and Price Changes,” Operations Research, 30, 839–840.

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Authors and Affiliations

  1. University of Michigan, Dearborn, USA

    Benjamin Lev

Authors
  1. Benjamin Lev
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Editor information

Editors and Affiliations

  1. Robert H. Smith School of Business, University of Maryland, College Part, Maryland, USA

    Saul I. Gass

  2. School of Information Technology & Engineering, George Mason University, Fairfax, Virginia, USA

    Carl M. Harris

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© 2001 Kluwer Academic Publishers

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Lev, B. (2001). Economic order quantity model extensions . In: Gass, S.I., Harris, C.M. (eds) Encyclopedia of Operations Research and Management Science. Springer, New York, NY. https://doi.org/10.1007/1-4020-0611-X_269

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  • DOI: https://doi.org/10.1007/1-4020-0611-X_269

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  • Publisher Name: Springer, New York, NY

  • Print ISBN: 978-0-7923-7827-3

  • Online ISBN: 978-1-4020-0611-1

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