2) Consider the following two-echelon inventory system. There are two depots at the lower echelon and one distribution center at the upper echelon. Demand is deterministic with a constant rate. Backordering is not allowed. Consider the following parameter setting:

What is the cost incurred per unit time for this inventory system? Be careful with the "system inventory" level for depot 1 and depot 2. It may not have the zero inventory property.

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Demand per week Cycle time Location Holding cost Replenishment cost per order Distribution center 4 weeks and 2 0.5/unit 10 weeks alternating Depot 1 4 2 weeks 2/unit 16 3 weeks 1/unit 4.5