Article ID: | iaor20126188 |
Volume: | 140 |
Issue: | 2 |
Start Page Number: | 756 |
End Page Number: | 764 |
Publication Date: | Dec 2012 |
Journal: | International Journal of Production Economics |
Authors: | Disney Stephen M, Warburton Roger D H |
Keywords: | inventory: order policies, combinatorial optimization |
We illustrate the use of the Lambert W function by analysing two Economic Order Quantity (EOQ) scenarios: an EOQ model with perishable inventory; and a Net Present Value analysis of an EOQ problem with trim loss. Both scenarios are motivated by real‐world situations. Via these two examples, we reflect upon the pedagogical aspects of using the Lambert W function. We present a Lambert W function ‘look‐up’ table for classroom use and a Microsoft Excel ‘Add‐In’ for self‐study and practical use. We also illustrate the use of the Laplace transform to conduct NPV analyses of the EOQ model.