EOQ model with time varying and uncertain demand

The economic order quantity (EOQ) model is a classic theory in inventory management, which is used to balance ordering costs and holding costs. Since it was proposed by F.W. Harris in 1913, the EOQ model has been at the core of inventory management. It determines the optimal order quantity through mathematical optimization methods to minimize total costs. Over time, the EOQ model has been continuously expanded and improved to adapt to more complex actual situations. In recent years, the traditional EOQ model needs to cope with the uncertainty and ambiguity in the modern business environment. In addition, with the improvement of environmental awareness, inventory management has also begun to consider environmental factors. This paper studies the EOQ model under demand variation and uncertainty, and proposes two algorithms: an algorithm based on the assumption of basic constants and a heuristic algorithm for time-varying demand. Through numerical examples and calculations, the practicality of optimizing order time to minimize total cost is demonstrated. This paper also explores the method of using probability distribution to deal with uncertain demand and provides a comprehensive formula for expected cost. With technological progress and the development of the global economy, the EOQ model will continue to evolve to meet the needs of a more complex and dynamic business environment.