Fuzzy-set theoretic interpretation of economic order quantity

Abstract

The economic order quantity (EOQ) formula is probably one of the most famous formulas in the industrial management field. Despite the longevous popularity of the formula, however, the composition and estimation of the cost parameters have always been vague and imprecise at best. In view of the inherently fuzzy aspect of the cost determination, the EOQ formula is re-examined in the fuzzy-set theoretic perspective. A secondary objective is to serve the newcomer to fuzzy systems theory as an easy introduction to the area.