Question: Part 1: Please write down the formula for total inventory cost as a function of order quantity Q. Part 2: First Order Condition. Based on

Part 1: Please write down the formula for total inventory cost as a function of order quantity Q.

Part 2: First Order Condition. Based on total inventory cost formula above, take the first derivate with respect to Q and set it to 0. Then derive Q*.

Part 3: Second Order Condition. Take the second derivate and discuss why it is > 0 (thus, the total inventory cost is minimized).

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