INVENTORY COST DEFINITION IN AN EOQ MODEL APPLICATION.

Willem J. Selen, Wallace R. Wood

Research output: Contribution to journalArticlepeer-review

16 Citations (Scopus)

Abstract

While EOQ-type inventory models are 'robust' to cost and demand estimation errors, cost definition errors can be severe and have significant impact on decisions. Cost figures for such models must be carefully defined in order to avoid common accounting pitfalls. An example problem illustrating a common pitfall using average, rather than marginal, cost is presented.

Original languageEnglish
Pages (from-to)44-47
Number of pages4
JournalProduction and Inventory Management Journal
Volume28
Issue number4
Publication statusPublished - 1987
Externally publishedYes

ASJC Scopus subject areas

  • Industrial and Manufacturing Engineering

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