Economic Fluctuations. Any opinions expressed are those of the authors and not those of the National Bureau of Economic Research.

In this paper we consider defective products and Taguchi’s cost of poor quality in the economic order quantity (EOQ) model. We assume that the product quality performs a normal distribution function, and the Taguchi’s poor quality cost has been involved. From our analysis, it has been found that the annual profit will be decreased if the poor quality of product and Taguchi’s quality cost are in...

We study a non–cooperative game for joint replenishment by n firms that operate under an EOQ–like setting. Each firm decides whether to replenish independently or to participate in joint replenishment,and how much to contribute to joint ordering costs in case of participation. Joint replenishment cycle time is set by an intermediary as the lowest cycle time that can be financed with the private...

We review historical patterns of economic geography for the United States from the colonial period to the present day. The analysis is framed in terms of two geographic scales: regions and cities. The compelling reason for studying geographic area of two different scales is that models that explain location of economic activities at one scale may not apply to other scales. We consider the proce...

Within the economic order quantity (EOQ) framework, the main purpose of this paper is to investigate the retailer’s optimal replenishment policy under permissible delay in payments. All previously published articles dealing with optimal order quantity with permissible delay in payments assumed that the supplier only offers the retailer fully permissible delay in payments if the retailer ordered...

Among the assumptions of the classical economic order quantity (EOQ) model is that all units that are purchased (or produced) are of perfect quality. However, this is frequently unrealistic since production processes deteriorate resulting in the production of defective products requiring rework. Some recent studies suggest that production systems performance might be improved by applying the fi...

The traditional inventory of the economic order quantity model assumes perfect items in an ordered lot and an infinite replenishment rate. However, such conditions are rare in actual production environments. Additionally, most studies of this problem have only considered suppliers offering the wholesaler a grace period. In practice, wholesalers often extend a fixed credit period to downstream c...

Cárdenas-Barrón (2010) applied algebraic methods to EOQ and EPQ models without referring to differential equations, allowing researchers without backgrounds in calculus to understand inventory models with ease. In this note, we point out that the derivation for EPQ model can be obtained by a transformation of the EOQ model and then we provide a further simplification of his approach such that f...

In general, a supplier/retailer frequently offer trade credit to stimulate their respective sales. The main purpose of this paper is to investigate the optimal supplier/retailer’s replenishment decisions under two levels of trade credit policy within the economic order quantity (EOQ) framework. This paper deals with the supplier/retailer’s inventory replenishment problem under two levels of tra...

In#ation uncertainty is introduced into a basic EOQ model and its potential to make mischief is explored. Among other things, it is shown that even when the expected rate of in#ation is less than the marginal cost of capital, the appropriate discount rate to use in computing a discounted expected total inventory cost will not necessarily be negative. Therefore, the classic EOQ square-root formu...