Formula of economic production quantity

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Reference no: EM131758979

Derive the formula of economic production quantity

Assumptions of EPQ are similar to EOQ except orders are received incrementally

during production

Q* = sqrt(2DS/ H)*sqrt[P/(P-u)]

Q= production quantity in units

H= Holding cost per unit per unit of time

D= demand, usually in units per unit of time

S= production set- up cost

P= production or delivery rate

u= usage rate

this seems different from the normally seen equation how should I fit u in?

Reference no: EM131758979

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