On the Lambert W function: Economic order quantity applications and pedagogical considerations

Abstract

We illustrate the use of the Lambert W function by analysing two Economic Order Quantity (EOQ) scenarios: an EOQ model with perishable inventory; and a Net Present Value analysis of an EOQ problem with trim loss. Both scenarios are motivated by real-world situations. Via these two examples, we reflect upon the pedagogical aspects of using the Lambert W function. We present a Lambert W function look-up table for classroom use and a Microsoft Excel Add-In for self-study and practical use. We also illustrate the use of the Laplace transform to conduct NPV analyses of the EOQ model.

Publication
International Journal of Production Economics, 40 (2), pp756–764