EIN%206336%20Spring%202010%20Test%201%20Solutions

# EIN%206336%20Spring%202010%20Test%201%20Solutions - 0 0...

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T 2 T 3 T 4 T -D Q T 2 T 3 T 4 T -D/2 Q 0 285 505 235 952.5 865 290 417.50 ( , -) ( , -) ( , -) ( , -) (0, 0) (0, -) 480 135 150 150 150 150 5 4 3 2 1 0 865 505 417.50 285 235 290 ( , -) (952.5, 0) (480, 0) (135, 0) (0, 0) (0, -) 952.5 480 135 150 150 150 150 5 4 3 2 1 0 0 865 417.50 285 235 290 (865, 1) (417.5, 1) (290, 1) (135, 0) (0, 0) (0, -) 952.5 480 135 150 150 150 150 5 4 3 2 1 0 0 865 505 417.50 285 235 290 (520, 4) (370,2) (285, 2) (135, 0) (0, 0) (0, -) 952.5 480 135 150 150 150 150 5 4 3 2 1 0 0 865 505 417.50 285 235 290 (570, 3) (370,2) (285, 2) (135, 0) (0, 0) (0, -) 952.5 480 135 150 150 150 150 5 4 3 2 1 0 0 865 505 417.50 285 235 290 (640, 2) (370,2) (285, 2) (135, 0) (0, 0) (0, -) 952.5 480 135 150 150 150 150 5 4 3 2 1 0 0 EIN 6336 Advanced Spring 2010 Test 1 Name:_________________________________________

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1. Consider a seller of a good who has customers that demand the good at a deterministic rate of D units per year. Assume that all of the assumptions of the EOQ model apply (including a fixed order cost \$ A , a cost of \$ v per unit, a holding cost rate of r \$/\$/year, and a constant lead time). The seller has determined that she would like to meet half of the demand in the year. To do this, she decides that she will follow a rule like the one shown in the graph below. Using this rule, she decides that half the time she will meet all demands while she has stock, and half the time she will permit all sales to be lost. Thus, the time between replenishments is 2 T . (Call this Policy 1.) (a) Write the average annual cost equation. TC
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EIN%206336%20Spring%202010%20Test%201%20Solutions - 0 0...

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