In the inventory problem of Example 2, suppose that the ordering cost is the same, but that it costs
Example 2 Inventory Control
Suppose that the manager in Example 1 wants to establish an optimal inventory policy for frozen orange juice. Gain, it is established that a total of
The ordering cost for each delivery is
It costs
Example 1 An Inventory Problem
A supermarket manager anticipates that
a. The manager places only one order during the year.
b. The manager places two orders during the year.
c. The manage places four orders during the year.
Carrying costs should be computed on the average inventory during the order-reorder period.
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