An Soda company sells about 400 gallons of its highly demanded beverage each week. The estimated cost to store as well maintain one gallon of this product is $0.50 per week. Each time the Soda company places an order from its supplier, the following costs are incurred, independent of the size of the order: a $300 delivery fee, $50 unloading and storage, and a $60 transaction fee. Once an order is placed, it arrives exactly 2 work days later. The Soda company, supplier, and delivery carrier all operate 7 days per week. Question: What is the optimal (s,Q) policy?

An Soda company sells about 400 gallons of its highly demanded beverage each week. The estimated cost to store as well maintain one gallon of this product is $0.50 per week. Each time the Soda company places an order from its supplier, the following costs are incurred, independent of the size of the order: a $300 delivery fee, $50 unloading and storage, and a $60 transaction fee. Once an order is placed, it arrives exactly 2 work days later. The Soda company, supplier, and delivery carrier all operate 7 days per week. Question: What is the optimal (s,Q) policy?

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Description: An Soda company sells about 400 gallons of its highly demanded beverage each week. The estimated cost to store as well maintain one gallon of this product is $0.50 per week. Each time the Soda company places an order from its supplier, the following

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 47P

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