Consider the EOQ model with planned shortages,as presented in Sec.18.3 of the textbook.Suppose,however,that the constraint S/Q = 0.8 is added to the model,where Q is the order quantity and S is the inventory level just after a batch of Q units is added to inventory.Derive the expression for the optimal value of Q,using the result for this model that the total cost per unit time is ,where d is the demand rate,K is the setup cost,c is the unit cost of ordering,h is the unit holding cost,and p is the unit shortage cost.

Question

Consider the EOQ model with planned shortages,as presented in Sec.18.3 of the textbook.Suppose,however,that the constraint S/Q = 0.8 is added to the model,where Q is the order quantity and S is the inventory level just after a batch of Q units is added to inventory.Derive the expression for the optimal value of Q,using the result for this model that the total cost per unit time is  ,where d is the demand rate,K is the setup cost,c is the unit cost of ordering,h is the unit holding cost,and p is the unit shortage cost.

Quizplus · Accepted Answer

The Answer is . .

.

.

Consider the EOQ Model with Planned Shortages,as Presented in Sec