Consider the equation giving the expected average annual cost of the policy (Q, R) in a continuous-review inventory control system from Section 5.4:

Design a spreadsheet to compute G(Q, R) for a range of values of Q EOQ and R . Use the following approximation formula for L(z) to avoid table look-ups:
L(z) exp(0.92 1.19z 0.37z2).
(This formula is from Parr, 1972.) Store the problem parameters

c, h, p, , , and in cell locations. Visually search through the tabled values of G(Q, R) to discover the minimum value and estimate the optimal (Q, R) values in this manner. Compare your results to the true optimal found from manual calculation.

a. Solve Example 5.4.

b. Solve Problem 13 in this manner.

c. Solve Problem 14 in this manner.

Transcribed Image Text:

G(OR) = b (2+r-r) ++1 PAn(R)