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3. You want to determine the ordering policy based on the information below in Table 1, where D, is the demand, c, is the
3. You want to determine the ordering policy based on the information below in Table 1, where D, is the demand, c, is the production cost, A, is the fixed cost and h, is the holding cost at time period t. Table 1. t 1 2 3 4 5 6 D 50 10 20 35 15 30 C 10 10 10 10 10 10 A 100 100 100 100 100 100 1 1 1 1 1 h 1 (a) When the total length of the periods is 6, find out the optimal ordering policy. (An optimal policy should include both the period and ordering quantity at the period.) (10 marks) (b) When the total length of the periods is only 4 (i.e., discard the demand at Periods 5 and 6), find out the optimal ordering policy. (5 marks) (c) Now the demand at Period 3 decreases to 10 (from 20). If the total length of the periods is 4 and you have placed an order at Period 1, you will place the 2nd order at Period 3 or 4? Why? (5 marks)
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