Generalized EOQ formula using a new parameter: Coefficient of backorder attractiveness

This paper introduces and examines a generalized EOQ formula, based on the model with linear and fixed backordering costs. The new square-root formula is a combination of two well-known classical models, the basic EOQ model without stockouts and the EOQ model with backorders and linear backordering costs. Helping to combine the two is a new parameter, a fractional coefficient capturing the attractiveness of backorders. The coefficient is explained and discussed. The paper concludes with a brief discussion of generalizations in EOQ models, including EPQ.