Ford W. Harris

Harris gave inventory management its first formula for balancing ordering cost against holding cost, and the EOQ is still taught and used as a starting point for reorder decisions. His model shows that the cost-minimizing order size rises with the square root of demand and order cost and falls as carrying cost rises. Consultant R. H. Wilson later popularized it, so it is also called the Wilson formula. Brands using EOQ to set purchase quantities should remember its assumptions of steady demand and fixed costs, and adjust for minimum order quantities and storage fees.

• Economic Order QuantityEOQOrder size with the lowest total cost
• Carrying CostTotal cost of holding inventory over time
• Reorder PointROPStock level that triggers a new order

• Kenneth Arrow1921–2017 · Economist, optimal inventory policy

1. Ford Whitman Harris (Wikipedia) en.wikipedia.org