problem 35 hw3 - 4.35 Optimal policy for supplier A...

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All Units Q (2) = ) 10 . 1 )( 23 (.. 480 )( 150 )( 2 ( = 754 not realizable. Q (1) = ) 20 . 1 )( 23 (. ) 480 )( 150 )( 2 ( = 722 OK C ost at 1000 and 722. At 1000: G 2 (1000)=(480)(1.10)+ (150)(480) 1000 + (.223)(1.10)(1000) 2 = $726.50 At 722: G 1 (722) = (480)(1.20) + (2)(150)(480)(.23)(1.20) = $775.36 supplier A, standing order should be 1000 units at cost $726.50 However, if they use supplier B: G 0 G 1 G 2 500 1000 4.35 Optimal policy for supplier A. = (40)(12)=480
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First find EOQs: at $1.25 Q *
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