K. Teerapabolarn, S. Khamrod
Department of Mathematics
Faculty of Science
Burapha University
Chonburi, 20131, THAILAND

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.

Received: July 2, 2014

AMS Subject Classification: 90B05

Key Words and Phrases: algebraic method, arithmetic-geometric mean inequality, backorders level, economic order quantity, economic production quantity

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