 |
Economic order quantity
The classical order quantity (Harris-Wilson formula) is computed.
Symbols:
| Bmax |
maximum
inventory |
| TP |
optimum
oder cycle = Qopt/demand rate |
| h |
holding
cost |
| s |
fixed
ordering cost |
| D |
demand
rate |
| Qopt |
optimum
order quantity |
Assumptions:
- continuous stationary demand
- infinite production
rate
- no quantity discounts
- no backorders
- any order quantity
> 0 is allowed
Literature:
- Heizer/Render
(1993), Chapter 14
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