Retrieving "Transportation Schedules" from the archives

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1. Periodic Review

   Linked via "transportation schedules"

   The optimal $T$ is often derived by equating the annual holding cost (calculated based on average inventory) to the annual ordering cost. If $K$ is the fixed ordering cost and $H$ is the holding cost per unit per year, the continuous approximation often suggests setting $T$ close to the economic order quantity (EOQ) derived time:
   $$T^* \approx \sqrt{\frac{2 K}{H \cdot \bar{D}}}$$
   However, in practice, $T$ is heavily constrained by external scheduling factors, such as [transportation schedules](/entries/tran…