Hmwk5sol - ISyE 3232 Stochastic Manufacturing and Service...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ISyE 3232 Stochastic Manufacturing and Service Systems Spring 2011 J. Dai and H. Ayhan Solutions to Homework 5 1. (a) Using the notation in Section 1.5 of the newsvendor notes: c f = 1000, c v = 40, h = 10, p = 100. The optimal order-up-to quantity S is the smallest one such that F ( S ) p- c v p + h = 100- 40 100 + 10 = 0 . 545 . Hence, S = 600. (b) L ( x ) = 100 E ( D- x ) + + 10 E ( x- D ) + The order-up-to quantity as computed in (a) is 600. For all x < 600, if we do not order the cost will be L ( x ) = 100(637 . 5- x ) if x 500 56875- 86 . 25 x if 500 < x 600 (1) if we choose to make the order the cost will be C ( x ) = 1000 + (600- x )40 + L (600) = 30125- 40 x we need to find x * such that L ( x * ) = C ( x * ) So x * 578 . 38. (c) If x = 0 we order 600 liters. Hence the cost is C (0) = 1000 + 600 * 40 + L (600) = 30125 . (2) If x = 700, we do not order. The cost is C (700) = L (700) = 2000 (3) 2. (a) Using the notation in Section 1.5 of the newsvendor notes: c f = 1000, c v = 40, h = 10, p = 100. The optimal order-up-to quantity S follows from F ( S ) = p- c v p + h = 100- 40...
View Full Document

Page1 / 3

Hmwk5sol - ISyE 3232 Stochastic Manufacturing and Service...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online