Some comments on “A simple method to compute economic order quantities”

In this note, we emphasize that the arithmetic–geometric-mean-inequality approach proposed by Teng [Teng, J.T., 2008. A simple method to compute economic order quantities. European Journal of Operational Research. doi:10.1016/j.ejor.2008.05.019] is not a general solution method. Teng’s approach happens to work and give the correct results when the two terms in an objective function are any functions such that their product is a constant. The classical EOQ model works fine since the product of the two terms is indeed a constant! When the product is not a constant, Teng’s approach is of little use. This is exemplified in Comment 1 via solving the EOQ model with complete backorders (where the model is regarded as having two decision variables). Comment 2 is generally valid for an algebraic method when it is used to solve an objective function with two decision variables.