The EOQ Formula - cargalmathbooks.com

the eoq Inventory FormulaJames M. CargalMathematics DepartmentTroy University Montgomery CampusA basic problem for businesses and manufacturers is, when ordering supplies, to determinewhat quantity of a given item to order. A great deal of literature has dealt with this problem(unfortunately many of the best books on the subject are out of print). Many formulas andalgorithms have been created. Of these the simplest Formula is the most used: the eoq (economicorder quantity) or Lot Size Formula . the eoq Formula has been independently discovered manytimes in the last eighty years. We will see that the eoq Formula is simplistic and uses severalunrealistic assumptions. This raises the question, which we will address: given that it is sounrealistic, why does the Formula work so well?

The EOQ Inventory Formula by J. M. Cargal Qh QT CDu 2 2 0 Q T h CD h T h uu 2 2 2 2 0 T h Q T h uuk 2 2 2 Tu * 2CDh Q* 2CD h In this formula the order cost per unit time is CD/Q and Qh/2 is the average inventory cost per unit

Loading..

Tags:

  Formula, The eoq formula cargalmathbooks, Cargalmathbooks, The eoq

Information