Cover: On the Convexity of the Backorder Function for an E.O.Q. Policy

On the Convexity of the Backorder Function for an E.O.Q. Policy

Published 1968

by Robin B. S. Brooks, John Y. Lu

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The backorder function for an economic order policy as derived by Hadley and Whitin, while convex in [r] (the reorder point) and convex in [Q] (the order quantity), is unfortunately not generally convex in both [r] and [Q]. It has been pointed out previously that such nonconvexity can lead to a failure of the optimization technique suggested by Hadley and Whitin. This study shows that if [r] is restricted to be suitably large, then [B(r, Q)] is convex within such a region.

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