Economic Order Quantity

by Jesus Pascal

Submitted : Fall 2011

An inventory management problem is considered and the optimum number of ordering cycle each year, the corresponding number of units ordered each cycle, and the total annual cost are determined.

The total cost function turns out to be a real function of one variable. So, differentiation tools from one single variable calculus, such as, intermediate value theorem, Newton's method, and the second derivative test are used to find the optimum number of units ordered.

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