Question: Change the ordering simulation so that emergency orders are never made. Instead, assume that all excess demand is backlogged, so the emergency cost should be
Change the ordering simulation so that emergency orders are never made. Instead, assume that all excess demand is backlogged, so the emergency cost should be replaced by a unit penalty cost for shortages. You can use the value $10. Now the inventory position is the amount on hand, plus the amount on order, minus the backlog.
Simulate the same (s, S) policies as in the example.
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