Abstract
This paper uses the algebraic arithmetic-geometric mean inequality method (the algebraic AGM method) to derive the optimal lot size and the optimal backorders level for the EOQ and EPQ models with backorders. The method is very simple to derive both the optimal lot size and optimal backorders level without derivatives. AMS Subject Classification: 90B05
Highlights
Since the first economic order quantity (EOQ) model was introduced by [6] and the economic production quantity (EPQ) model was presented by [8], the lot size for the EOQ and EPQ models with and without backorders have been studiedReceived: July 2, 2014 §Correspondence author c 2014 Academic Publications, Ltd. url: www.acadpubl.euK
He used the arithmetic-geometric mean (AGM) and CBS inequalities to derive the EOQ and EPQ models with backorders, and he said that the method is simpler than the algebraic methods presented by [5] and [1]
We present the algebraic AGM method, which is used to derive the optimal solutions of EOQ and EPQ models with backorders
Summary
Since the first economic order quantity (EOQ) model was introduced by [6] and the economic production quantity (EPQ) model was presented by [8], the lot size for the EOQ and EPQ models with and without backorders have been studiedReceived: July 2, 2014 §Correspondence author c 2014 Academic Publications, Ltd. url: www.acadpubl.euK. After that [5] used this method to derive the EOQ model with backorders. An optimization approach: the arithmetic-geometric mean (AGM) inequality and the Cauchy-Bunyakovsky-Schwarz (CBS) inequality, which proposed by Cardenas-Barron [2]. He used the AGM and CBS inequalities to derive the EOQ and EPQ models with backorders, and he said that the method is simpler than the algebraic methods presented by [5] and [1]. We apply the algebraic method and the AGM inequality (the algebraic AGM method) to derive the optimal lot size and the optimal backorders level for the EOQ and EPQ models with backorders
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