| Article ID: | iaor19932111 |
| Country: | United Kingdom |
| Volume: | 20 |
| Issue: | 4 |
| Start Page Number: | 523 |
| End Page Number: | 527 |
| Publication Date: | Jul 1992 |
| Journal: | OMEGA |
| Authors: | Erel E. |
The sensitivity of the basic economic order quantity (EOQ) model to continuous purchase price is explored. The phenomenon of continuous price changes exists in several countries and it is not likely to improve. The paper shows that using the conventional EOQ can be quite costly and far from optimal, if the holding cost rate is determined erroneously by ignoring the price change.