Question: Suppose the setup cost is now $ 5 . 5 whereas production cost reduced to $ 0 . 5 per item. You are informed that
Suppose the setup cost is now $ whereas production cost reduced to $ per item. You are informed that the company always follows a fixed policy: ie producing and items for runs and respectively without taking into account the inherent stochasticity. a Calculate the expected cost incurred for the fixed policy. points b Find out the optimal policy and the optimal cost using probabilistic DP points c Calculate the percentage improvement over the fixed policy if the optimal policy would be implemented. points
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