Nonlinear Programming Analysis to Estimate Implicit Inventory Backorder Costs

In this paper, we use nonlinear programming to provide an alternative treatment of the economic order quantity problem with planned backorders. Many businesses, such as capital-goods firms that deal with expensive products and some service industries that cannot store their services, operate with substantial backlogs. In practical problems, it is usually very difficult to estimate accurately the values of the two types of backorder costs, i.e., …