I think you better rethink your while condition there (and probably the definition of lambda_o):
while abs((lambda-lambda_o)/lambda) > 0.001
When the while loop has executed at leat once, then lambda_o is a 1-by-2 vector, the second element of which is lambda (a scalar). Therefore the expression (lambda-lambda_o)/lambda is a 1-by-2 vector with second element equal to 0. A non-scalar conditional expression (e.g., a while condition with a vector) will evaluate to true if and only if all elements are true. Since the second element of your while expression is zero after the first time through the while loop (and 0 is not greater than 0.001), the while loop will never execute a second time.
Not to mention that, after the inital test, the while condition is only tested for mu = 0.5, which is to say, you probably should rethink the relationship between the while loop and the for mu loop as well.
