Origins of the Economic Order Quantity Formula

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Roach, Bill
Washburn University. School of Business
Kaw Valley Bank
Issue Date
January 2005
Alternative Title
This paper speculates on how the Economic Order Quantity (EOQ) formula was developed. These speculations are interesting and useful for several reasons: 1.) The speculations help scholars understand the creative process and perhaps to teach in a way that enhances the creativity of our students, 2.)They help us better understand how much mathematics our students need to understand the rest of the curriculum, 3.)They bring us in contact with a "beautiful mind," and 4.)They illustrate some of the ambiguities inherent in trying to use citations to give appropriate credit for ideas. This paper describes the manner in which Ford Whitman Harris developed the EOQ model from Kelvin's Law, a law describing the costs of an electrical transmission system.