EOQ systems: The case of an increase in purchase cost

EOQ systems: The case of an increase in purchase cost

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Article ID: iaor1991432
Country: United Kingdom
Volume: 41
Issue: 7
Start Page Number: 633
End Page Number: 637
Publication Date: Jul 1990
Journal: Journal of the Operational Research Society
Authors:
Abstract:

In an EOQ system, an anticipated price increase may require determination of an exception lot. A criterion of minimizing the maximum error in terms of cumulative costs is used to determine this lot. This avoids the pitfalls raised on earlier works that compare out-of-phase inventory policies. The exception lot determined happens to be equal to the one obtained by an average cost model.

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