An economic order quantity model with demand-dependent unit cost

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65 Citations (Scopus)

Abstract

For the classical EOQ problem a relationship between demand and unit cost may exist under certain circumstances. We propose an EOQ model with demand-dependent unit cost and formulate the optimization problem as a geometric program (GP). We solve the GP analytically to obtain a closed-form optimal solution. An illustrative example is provided to show the working procedures of applying GP to solve a given problem. We also touch on some aspects of sensitivity analysis based on the GP approach. We demonstrate in this paper the point that GP has potential as a viable mathematical tool for the analysis of a certain class of inventory control problems.
Original languageEnglish
Pages (from-to)252-256
Number of pages5
JournalEuropean Journal of Operational Research
Volume40
Issue number2
DOIs
Publication statusPublished - 25 May 1989
Externally publishedYes

Keywords

  • EOQ
  • geometric programming
  • Inventory

ASJC Scopus subject areas

  • Modelling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

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