The effect of continuous price change in the EOQ
523 - 527
Item Usage Stats
MetadataShow full item record
The sensitivity of the basic economic order quantity (EOQ) model to continuous purchase price changes 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.