INVENTORY COST DEFINITION IN AN EOQ MODEL APPLICATION.

Willem J. Selen; Wallace R. Wood

INVENTORY COST DEFINITION IN AN EOQ MODEL APPLICATION.

Willem J. Selen, Wallace R. Wood

Research output: Contribution to journal › Article › peer-review

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 language	English
Pages (from-to)	44-47
Number of pages	4
Journal	Production and Inventory Management Journal
Volume	28
Issue number	4
Publication status	Published - Dec 1 1987

ASJC Scopus subject areas

Industrial and Manufacturing Engineering

Cite this

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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.",

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INVENTORY COST DEFINITION IN AN EOQ MODEL APPLICATION.

Abstract

ASJC Scopus subject areas

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