The pdf of the demand per period in an infinite-horizon inventory model is given as f1D2 =

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The pdf of the demand per period in an infinite-horizon inventory model is given as f1D2 = .08D, 0 … D … 5 The unit cost parameters are Unit selling price = $10 Unit purchase price = $8 Unit holding cost per month = $1 Unit penalty cost per month = $10 Discount factor = .9 Determine the optimal inventory policy assuming zero delivery lag and that the unfilled demand is backlogged.

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