Homework2_sol

# Homework2_sol - Stanford University Management Science and...

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Stanford University Management Science and Engineering MS&E 260 Fall 2016 Homework #2, Solution 1/3 MS&E 260: Introduction to Operations Management HOMEWORK #2, SOLUTION Thus Q* = 30 (linearly interpolated cumulative density 28.33 29)

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Stanford University Management Science and Engineering MS&E 260 Fall 2016 Homework #2, Solution 2/3 d. Average Holding Cost = h *(0.5*Q +R - = 2580 (2 pts) Average annual setup cost - = 2087 (1 pt) Average stock out cost = = 234.57 (2 pts.) Total Cost = 4901.57 e. When there is no variability EOQ solution is optimal (3 pts.) Total cost with EOQ
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