Consider the EOQ Model with Planned Shortages,as Presented in Sec

question 2

Essay

Consider the EOQ model with planned shortages,as presented in Sec.18.3 of the textbook.Suppose,however,that the constraint S/Q = 0.8 is added to the model,where Q is the order quantity and S is the inventory level just after a batch of Q units is added to inventory.Derive the expression for the optimal value of Q,using the result for this model that the total cost per unit time is ,where d is the demand rate,K is the setup cost,c is the unit cost of ordering,h is the unit holding cost,and p is the unit shortage cost.

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Definitions:

Jean Calvin

A French theologian, pastor, and reformer in Geneva during the Protestant Reformation who was a principal figure in the development of the system of Christian theology later called Calvinism.

Great Schism

refers to the division within the Christian Church in 1054, leading to the separate development of the Eastern Orthodox and Western Roman Catholic churches.

Northern Renaissance

The cultural and intellectual movement in Europe, particularly in the northern regions, during the 14th to 17th centuries, characterized by a resurgence of interest in classical learning and values.