Question: EOQ with Back-orders - Example 1 Demand for an item is constant at 100 units a month. Unit cost is OMR50, reorder cost is OMR50,

EOQ with Back-orders - Example 1 Demand for an item is constant at 100 units a month. Unit cost is OMR50, reorder cost is OMR50, holding cost is 25% of value a year, shortage cost for back-orders is 40% of value a year. a) Find the optimal inventory policy for the item. b) What is the total cost? c) What would be the total cost if no shortage is allowed?

Demand for an item is constant at 100 units a month. Unit cost is OMR50, reorder cost is OMR50, holding cost is 25% of value a year, shortage cost for back-orders is 40% of value a year. a) Find the optimal inventory policy for the item. b) What is the total cost? c) What would be the total cost if no shortage is allowed

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