Using the Deterministic EOQ Formula in Stochastic Inventory Control

This note gives an improved bound (\root 5 - 2)/2 \approx 0.1180 for the relative cost increase when using the deterministic EOQ formula as a heuristic solution when demands are stochastic. We also discuss under what circumstances this bound is tight.

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Year of publication:	1996
Authors:	Axsäter, Sven
Published in:	Management Science. - Institute for Operations Research and the Management Sciences - INFORMS, ISSN 0025-1909. - Vol. 42.1996, 6, p. 830-834
Publisher:	Institute for Operations Research and the Management Sciences - INFORMS
Subject:	inventory/production \| lot sizing \| error bound

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Extent:	application/pdf
Type of publication:	Article
Other identifiers:	10.1287/mnsc.42.6.830 [DOI]
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009218069