Hence we can stop the entire computation as long as

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Unformatted text preview: 
 of
 λ,
 we
 get
 :
 λ*=1.204799
 
 Item
 1
 2
 3
 D
 12,500
 15,000
 15,000
 A
 150
 80
 80
 h
 2.4
 3.5
 3
 Unit.
Stor( )
 5
 4
 4
 NEW
Q
 509.4621425
 427.3999954
 435.7723896
 Stor.
Need
2
 2547.310713
 1709.599982
 1743.089559
 Total
Storage
 6000.000253
 
 Thus,
 the
 optimized
 order
 quantities
 for
 item
 1,
 2,
 and
 3
 should
 be
 509,
 427,
 and
 436,
 respectively.
 As
 discussed
 in
 class,
 ‐λ*
 denotes
 the
 derivative
 of
 the
 optimal
 cost
 with
 respect
 to
 the
 size
 of
 the
 storage
 area
 F,
 and
 therefore,
 we
 should
 not
 be
 willing
 to
 pay
 more
 than
 1.2
 dollars
 per
 extra
 sq.
 ft.
 
 5.
(20
pts)
 
 Time
 1
 2
 3
 4
 5
 6
 Demand
 100
 150
 75
 75
 50
 60
 Inventory
 on
 hand
 60
 
 
 
 
 
 Actual
 Demand
 40
 150
 75
 75
 50
 60
 
 In
 the
 c...
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This note was uploaded on 07/20/2013 for the course ISYE 6201 taught by Professor Staff during the Fall '08 term at Georgia Tech.

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