Consider the following inventory model

Reference no: EM131105210

Consider the following inventory model, which is a single-period model with known density of demand elsewhere.

There are two costs connected with the model. The first is the purchase cost, given by c(y x). The second is a cost p that is incurred once if there is any unsatisfied demand (independent of the amount of unsatisfied demand). (a) If x units are available and goods are ordered to bring the inventory level up to y(if x (b) If a fixed cost K is also incurred whenever an order is placed, describe the optimal policy

Reference no: EM131105210

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