Determine the economic order quantity

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Reference no: EM131105084

In the basic EOQ model, suppose the stock is replenished uniformly (rather than instantaneously) at the rate of b items per unit time until the order quantity Q is fulfilled. Withdrawals from the inventory are made at the rate of a items per unit time, where α

(a) Find the total cost per unit time in terms of the setup cost K, production quantity Q, unit cost c, holding cost h, withdrawal rate a, and replenishment rate b.

(b) Determine the economic order quantity Q*.

Reference no: EM131105084

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