On carrying costs and the EOQ model: a pedagogical note

If adjustments are made in the concepts underlying carrying cost curves in economic order quantity (EOQ) models, new possibilities arise for when the curve will balance the ordering cost curve. Generally, the curve is seen as a linear function. However, if it is concave upward, denoting increasing costs, or concave downward, due to lower costs or economies of scale, the intersection point with the cost curve shifts. Understanding how and why provides insight into the workings of the EOQ model.