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The leadership team at AquaLux, a prominent bath soap manufacturer, is aiming to optimize their inventory expenses. The cost incurred weekly for holding a single

The leadership team at AquaLux, a prominent bath soap manufacturer, is aiming to optimize their inventory expenses. The cost incurred weekly for holding a single unit of soap in stock amounts to 30(where one unit equates to 1000 soap cases). The marketing division has projected a weekly demand with an average of 120 units and a standard deviation of 15 units. This demand follows a relatively accurate normal distribution pattern. Sales exceeding the available soap quantity result in lost sales; in other words, there's no backlog for unmet demand.
The manufacturing department can operate at one of three production capacities: 110,120, or 130 units per week. A production level shift incurs a 3000 cost. The management intends to assess the following production strategy: When the existing inventory falls below L =30 units, they will manufacture 130 units in the subsequent week. If the current inventory surpasses U =80 units, they will produce 110 units in the upcoming week. In all other cases, AquaLux will maintain the previous week's production level. At present, AquaLux maintains an inventory of 60 units. The production level from the prior week was set at 120 units.

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