The optimal ordering policy

Reference no: EM131105260

Consider a one-period model where the only two costs are the holding cost, given by

If you order, you must order an integer number of batches of 100 units each, and this quantity is delivered immediately. Let G(y) denote the total expected cost when there are y units available for the period (after ordering).

(a) Write the expression for G(y).

(b) What is the optimal ordering policy?

Reference no: EM131105260

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