Using the deterministic EOQ formula in stochastic inventory control

Using the deterministic EOQ formula in stochastic inventory control

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Article ID: iaor19971764
Country: United States
Volume: 42
Issue: 6
Start Page Number: 830
End Page Number: 834
Publication Date: Jun 1996
Journal: Management Science
Authors:
Keywords: production
Abstract:

This note gives an improved bound equ1 for the relative cost increase when using the deterministic EOQ formula as a heuristic solution when demands are stochastic. This paper also discusses under what circumstances this bound is tight.

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