Question: Problem 4. (20 points) Formulate the annual cost function when the EOQ model allows backorders. There are two decision variables in this formulation, order quantity

Problem 4. (20 points) Formulate the annual cost

Problem 4. (20 points) Formulate the annual cost function when the EOQ model allows backorders. There are two decision variables in this formulation, order quantity Q and maximum number of backorders, B. Denote b as backorder cost per year per customer. (Note: You do not have to derive the optimal decisions.) Inventory Time

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