An EOQ model for stochastic demand for limited capacity of own warehouse

摘要

This paper deals with an economic order quantity (EOQ) model for uncertain demand when capacity of own warehouse (OW) is limited and the rented warehouse (RW) is considered, if needed. The expected average cost function is formulated for both continuous and discrete distributions of demand function by trading off holding costs and stock out penalty. The model is justified by suitable illustrations for various types of distributions.