Timeline for Units in the EOQ problem
Current License: CC BY-SA 4.0
8 events
| when toggle format | what | by | license | comment | |
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| Jun 11, 2019 at 18:50 | vote | accept | LarrySnyder610 | ||
| Jun 11, 2019 at 18:50 | comment | added | LarrySnyder610 | So, TL;DR: Either measure $K$ in \$ and $Q$ in items, or $K$ in \$/order and $Q$ in items/order, but in the latter case we also need a term $o_t$ that indicates the number of orders placed at time $t$, with units orders. Either approach is self-consistent and acceptable, but the former approach seems cleaner. | |
| Jun 10, 2019 at 21:46 | history | edited | alerera | CC BY-SA 4.0 |
Long edit to clarify the thinking here, which I hope is helpful. It feels like a lot of discussion about a simple concept, but oh well.
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| Jun 10, 2019 at 21:00 | comment | added | alerera | I'll clarify in an edit. Demand is measured in "inventory per time", the order quantity Q is measured in "inventory". Orders can be considered a dimension, but it is redundant in the standard EOQ which is why I said it wasn't fundamental. | |
| Jun 10, 2019 at 20:40 | comment | added | LarrySnyder610 | What is the overriding principle that determines whether orders are a dimension or an exogenous metric? For example, consider this very simple problem: Demand is exactly 100 items/year and we place exactly 5 orders/year; what is $Q$ and what are its units? Obviously it's 20, but its units would be items/order. Here, order seems like a dimension, not a metric. Why would it be a metric in one problem but a dimension in another? | |
| Jun 10, 2019 at 20:35 | comment | added | LarrySnyder610 | "orders is not a dimension but rather an endogenous performance metric" -- I think this probably gets to the heart of it. But I'm still not sure we're there. For example, I agree that "the count of orders per time is always $\lambda/Q$," but if the units of $Q$ are items, then the units of $\lambda/Q$ are $1/\text{year}$, not $\text{orders}/\text{year}$ -- so why are those the units for orders per time? | |
| Jun 10, 2019 at 19:24 | history | edited | alerera | CC BY-SA 4.0 |
added 2 characters in body
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| Jun 10, 2019 at 16:19 | history | answered | alerera | CC BY-SA 4.0 |