The EPQ model with random defective rate under service constraint without calculus

Huang (2006) studied the effect of service level constraint on the economic production quantity (EPQ) model with random defective rate. He offered an algebraic approach to replace his differential calculus skill to find the optimal solution under the expected annual cost minimized. In this article, we want to use an easy and simple arithmetic-geometric mean inequality approach to determine the retailer's optimal solution under minimizing the expected annual cost. This approach could therefore be used easily to introduce the basic inventory theories to younger students who lack the knowledge of calculus.