# Question

Find the optimal ordering policy for the stochastic single-period model with a setup cost where the demand has the probability density function

and the costs are

Holding cost = $1 per item,

Shortage cost = $3 per item,

Setup cost = $1.50,

Production cost = $2 per item.

Show your work, and then check your answer by using the corresponding Excel template in your OR Courseware.

and the costs are

Holding cost = $1 per item,

Shortage cost = $3 per item,

Setup cost = $1.50,

Production cost = $2 per item.

Show your work, and then check your answer by using the corresponding Excel template in your OR Courseware.

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