(MULTI-PERIOD MODEL). We have a probabilistic inventory model where demand is accumulated and orders are...
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(MULTI-PERIOD MODEL). 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.
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