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An (s, S) Inventory Simulation (Model 5-4)

An (s, S) Inventory Simulation (Model 5-4). Single-item (widgets), managed by (s, S) Policy s = 20, S = 40, Initial Inventory = 60. Starting Net Inventory of day t , I ( t ), is reviewed If I ( t ) < s, place an order to bring I(t) up to S

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An (s, S) Inventory Simulation (Model 5-4)

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  1. An (s, S) Inventory Simulation (Model 5-4) • Single-item (widgets), managed by (s, S) Policy • s = 20, S = 40, Initial Inventory = 60. • Starting Net Inventory of day t, I(t), is reviewed • If I(t) < s, place an order to bring I(t) up to S • An order incurs a $32 fixed cost and a $3/unit variable cost • Order lead time (days) is uniformly distributed on (0.5,1) • Demand is generated from arriving customers • Customer inter-arrival time is Exp(0.1) days. • A customer demands 1, 2, 3, or 4 widgets w.p. 0.167, 0.333, 0.333, 0.167. • Excess demand is backlogged. • Holding and shortage costs are based on I(t) • If I(t) > 0, a holding cost 1I(t) is charged • If I(t) < 0, a shortage cost -5I(t) is charged

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