Unformatted text preview: x > 0 and time t < N , consider the diﬀerence between the optimal price and what it would be if we had x + 1 units of inventory on hand. Call this the sensitivity of price to inventory. What is the maximal sensitivity, and at what x > 0 and t < N does this occur? Correlated Demands Do problem 4.7 from the textbook. Capacity Expansion Do problem 4.11 from the textbook. Item Decomposition Explain why an optimal item-based strategy as discussed in class results in an order-up-to strategy for each echelon of the system....
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- Spring '10
- $400, optimal price, Markov Chains Prof., optimal future revenue, optimal item-based strategy