The EOO Model-Basic Model 国 Express the average annual cost as a function of the lot size Order cost in each order cycle:C(Q)=K+cQ; The average holding cost during one order cycle is hQ/2; The average annual cost(suppose there are n cycles in a year) G(Q)=(Ktcon ho K+cO hO K元 nT 2 O/1 2 Q +2c+一 2 KA h 2KA >0for9>0 G@)=0→0= 2KA hThe EOQ Model-Basic Model Express the average annual cost as a function of the lot size • Order cost in each order cycle: C(Q)=K+cQ; • The average holding cost during one order cycle is hQ/2; • The average annual cost (suppose there are n cycles in a year) : ( ) ( ) 2 /2 2 K cQ n hQ K cQ hQ K hQ GQ c nT Q Q            2 3 2 '( ) ; ''( ) 0 0; 2 Kh K G Q G Q for Q Q Q        * 2 '( ) 0 K GQ Q h   