Lec 12

# Lec 12 - IEOR151Notes10/13 Team12 Schedule 10/12...

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IEOR 151 – Notes 10/13 Team 12 Schedule: 10/12 presentations (4 6) 10/27 midterm (review session before) 11/8 NO LECTURE (work on project) 11/10 presentations (7 10) 11/17 presentations(11 13) 11/24 NO LECTURE (Thanksgiving) 12/1 overview: final exam, industry, not covered issues… 12/6 week project 12/17 final project reports due INVENTORY MODELS Last Lecture: beer seller’s problem Input: D, r, c, v Decision Variable: y Optimal Solution: prob(y>D)= C୳ C୳ାC୭ where Cu=r c underage cost Co=c v overage cost Suppose we can’t return the beer (NO v), but we can keep it and sell it the next day (h, holding cost): Input: D, r, c, h C୳ C୳ାC୭ = ୰ିୡ ୰ା୦ Decision Variable: y Cu=r c Co=c+h Considering also π (penalty cost) a loss of goodwill: Input: D, r, c, h, π Decision Variable: y Cu=r c+ π Co=c+h

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