EOQ Systems: The Case of an Increase in Purchase Cost

Horácio Hideki Yanasse

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Supply Chain and Inventory Management Management and Optimization Techniques Operations Management Techniques

Abstract

In an EOQ system, an anticipated price increase may require determination of an exceptiom lot. A criterion of minimizing the maximum error in terms of cumulative costs is used to determine this lot. This avoids the pitfalls raised on earlier works that compare out-of-phase inventory policies. The exception lot determined happens to be equal to the one obtained by an average cost model.

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1975Economic Order Quantities with Inflation 1981Purchase-Inventory Decision Models for Inflationary Conditions 1981Optimal ordering policies when anticipating parameter changes in EOQ systems

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1996Economic replenishment strategies for announced price increases 2013Joint pricing and ordering policies for deteriorating item with retail price-dependent demand in response to announced supply price increase 2001Lot‐sizing Decisions Under Limited‐time Price Reduction*

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