The classical economic order quantity formula

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Abstract

Most continuous time inventory models which allow for the stochastic nature of demands usually include a delivery lag. This disguises a close link between deterministic and stochastic formulations of the inventory problem. By assuming that there is no delivery lag a stochastic version of the classical economic lot size model is developed. It yields the traditional square root formula where the constant demand term is replaced by mean demand.

Original languageEnglish
Pages (from-to)125-127
Number of pages3
JournalOperational Research Quarterly
Volume24
Issue number1
DOIs
Publication statusPublished - 1 Jan 1973
Externally publishedYes

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