The effect of continuous price change in the EOQ

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Abstract

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.

Source Title

Omega

Publisher

Pergamon Press

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Citation

Published Version (Please cite this version)

Language

English