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Unformatted text preview: value for T. Use the following notation: Di is the demand rate for item i, Ai is the ordering cost for item i, and hi is the inventory holding cost rate for item i, i = 1, 2, ... , n. 3. Consider the basic EOQ inventory problem but with backorders allowed. That is, we may allow an inventory shortage to develop before the replenishment arrives. In addition to the usual parameters D, A, and h, there is a penalty cost b per unit short per unit time. Let Q denote the decision variable for the order size, and let s denote the decision variable for the amount of shortage at the end of the replenishment cycle, i.e., just before a new replenishment arrives. As a function of Q, s and D, what is the length of the replenishment cycle? Develop an expression for the total cost rate T(Q, s)....
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This note was uploaded on 02/09/2010 for the course ENGIN 10 taught by Professor Johnson during the Fall '08 term at Berkeley.
- Fall '08