For the item used in the numerical illustration of Rosenfield’s approach in Section 8.6.2:

a. What happens if the current salvage value is 0.8 instead of 0.5? Explain the result.

b. What happens if the current salvage value is 0.7 instead of 0.5? Explain the result.

c. Now suppose that the batch size is geometric with parameter q = 0.4 and the current salvage value is 0.5. How many units should be saved? lpo897