An entropic economic order quantity (EnEOQ) for items with imperfect quality

Abstract This paper presents an entropic version of an EOQ model with imperfect quality items. The approach adopted herein models the commodity flow (demand rate) as a heat flow in a thermodynamic system. As a result, an entropy cost term is added to the classical inventory cost to form an entropic total inventory cost function. This provides an estimation of the hidden or difficult to estimate cost inventory systems that usually are the result of disorder (or entropy). A mathematical model is developed with numerical results presented and discussed.

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