Supplement C Special Inventory Models
Learning Goals
After reading this supplement, you should be able to:
Calculate the optimal lot size when replenishment is not instantaneous.
Determine the optimal order quantity when materials are subject to quantity discounts.
Calculate the order quantity that maximizes the expected profits for a one-period inventory decision.
Many real-world problems require relaxation of certain assumptions on which the economic order quantity (EOQ) model is based. This supplement addresses three realistic situations that require going beyond the simple EOQ formulation.
Noninstantaneous Replenishment. Particularly in situations in which manufacturers use a continuous process to make a primary material, such as a liquid, ...
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