Holding costs under push or pull conditions - The impact of the Anchor Point

@article{Beullens2011HoldingCU,
  title={Holding costs under push or pull conditions - The impact of the Anchor Point},
  author={Patrick Beullens and Gerrit K. Janssens},
  journal={European Journal of Operational Research},
  year={2011},
  volume={215},
  pages={115-125}
}
Holding costs are traditionally determined from the investment in physical stock during a cycle. An alternative approach instead derives holding costs from Net Present Value (NPV) functions. It is known that applying both frameworks to the same system can lead to different holding cost valuations, but little explanation has been offered. By introducing the Anchor Point in a model, this paper shows, for four different systems, that traditional holding cost models (implicitly) assume pull… CONTINUE READING

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