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4) The inventory of a purchased item is controlled with a continuous review (Q,R) policy. The item demand over 4 weeks of lead time follows
4) The inventory of a purchased item is controlled with a continuous review (Q,R) policy. The item demand over 4 weeks of lead time follows a uniform distribution with a mean of 500 units in the interval of (200, 800). Fixed cost of ordering is S300, and the unit carrying cost per week is $0.18. Shortages are backordered at a cost of S6 per unit. a. Write down the expected annual cost function. (assume 50 weeks in a year) b. Find the conditions that will yield the optimal solution for Q and R. Solve for Q and R
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