PROBLEM B: AN INVENTORY MANAGEMENT PROBLEM In the following problem, find the best ordering policies: Approved BBS Coursework Brief Template 2019/20 2 of 6 A company that sells a single product would like to decide how many items it should have in inventory for each of the next 13 months. The company receives a lump-sum demand for everv month in advance so the comnanv knows the demand in the next 1.3 month as follows. Given that the information for demand is known in advance, the company can decide how many items to order from its supplier in whe company orders Z items, it incurs a cost of K+iZ, where K=30 is the setup cost (transportation, administrative, etc) and i=3 is the incremental purchase cost per item ordered. (If Z=0, no cost is incurred.) When an order is placed, the time required for it to arrive (lead time) is 1 month. (Therefore, the order placed at t=1 will arrive at beginning of t=2 ). occurs at the beginning of the month and that is the time when last month order arrives. There is holding costs for keeping inventory. Let I(t) be the inventory level at the end of month t [note that I(t) can be positive, or zero but not negative]. We assume the company incurs a holding cost of h=1 per item per month held in (positive) inventory for a month. Assume that the initial inventory level is I(0)=50 and that no order is outstanding. a) Determine the best ordering policy. b) Write a report explaining the steps you take in approaching the above problems