For the A, ai’s deterministic demand context, consider a special coordinated strategy—

namely, where all mi = 1.

a. Determine the optimal value of T.

b. Determine the associated minimum total relevant costs per unit time.

c. Find the best independent and coordinated (the latter with all mi = 1 as above)

strategies for each of the following two examples:

Example 1 A = $10 r = 0.2/year Di vi ai Item i (Units/Year) ($/Unit) ($)

1 800 1 2 2 400 0.5 2 Example 2 A = $10 r = 0.2/year Di vi ai Item i (Units/Year) ($/Unit) ($)

1 900 1 2 2 20 0.5 4

d. Determine as simple a relationship as possible that must be satisfied in order for the above special case of coordinated control (every mi = 1) to be preferable to completely independent control. Ignore any system costs in your analysis. Normalize where possible to reduce the number of parameters. P-96