Question: Consider the inventory problem. (a) Explain why the solution to (1.4.3) is non-decreasing when is decreasing. Interpret this fact in the context of the

Consider the inventory problem.

(a) Explain why the solution to (1.4.3) is non-decreasing when δ is decreasing. Interpret this fact in the context of the problem.

(b) Find the optimal size s of the order for two cases: (i) X is uniform on [0, 2m]; (ii) X is exponential with a mean of m. (So, the mean demand is the same for both cases.) Which optimal order is larger? Does the answer depends on δ? Consider the inventory problem.(a) Explain why the solution to (1.4.3) is non-decreasing

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