We have a probabilistic inventory model where demand is accumulated and orders are received with zero delivery
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Question:
We have a probabilistic inventory model where demand is accumulated and orders are received with zero delivery delays. delivery delays. The probability distribution function of the demand per period is uniform between 0 and 10. period is uniform between 0 and 10, and the cost parameters are
- Selling price per unit $2
- Purchase price per unit $1
- Storage cost per unit per month $0.10
- Penalty cost per unit and per month $3
- Discount factor = 0.8
Determine the optimal inventory policy for the two periods, assuming that the starting inventory for period 1 is zero. initial inventory for period 1 is zero.
Expert Answer:
Inventories are stocks of raw materials components and finished goods that are stored in warehouses the instrumentalities of transportation and retail stores Raw material inventories are necessary to ... View the full answer
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