Optimal ordering policy that minimizes total cost per unit

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Reference no: EM132140037

Consider an invenotry model for a product where the demand is constant at rate 12 per unit time. Assume that once an order of size y is placed, units arrive at a rate of 20 unit per time. Suppose the cost of placing and order is 0.6 and the cost per unit ordered is 2. Assume further that the cost of storing one unit of the product per unit time is 0.01

Assuming no shortage is allowed, find the optimal ordering policy that minimizes the total cost per unit (TCU). Please specificy the size of the order and the time between two consecutive order placements.

Reference no: EM132140037

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