Ekra Sanggala

Step-Wise Holding Costs and Capacity Constraints in the EOQ Model: Accounting Valuation versus Operational Relevance

The accuracy of the Economic Order Quantity (EOQ) model relies on the validity of its input parameters, particularly the holding cost. Conventional practices often adopt a full-costing accounting approach by incorporating fixed warehousing costs (rent, depreciation, salaries) into the decision variable. This practice i...