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

Abstract. The algebraic arithmetic-geometric mean inequality method (the algebraic AGM method) is used to derive the optimal lot size and the optimal backorders level for the EOQ and EPQ models with backorders and defective items introduced by [#!H!#]. The method is easy 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, defective items, economic order quantity, economic production quantity

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