The Robustness Of The Basic EOQ

Abstract

The robustness of the basic Economic Ordering Quantity (EOQ) is studied for annual demand, set-up cost, and holding cost from various uniform and normal probability distributions.  Instead of comparing TC^*( ) and TC^*(Q^*) where  is an estimate of Q*, the ( ) and TC^*(Q^*) are compared where ( ) is the total cost from realizations of annual demand, set-up cost, and holding cost.  Simulation results show the robustness of the basic EOQ.