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(MULTI-PERIOD MODEL). We have a probabilistic inventory model where demand is accumulated and orders are...

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Accounting

(MULTI-PERIOD MODEL). We have a probabilistic inventory model where demand is accumulated and orders are received with zero delivery delays. delivery delays. The probability distribution function of the demand per period is uniform between 0 and 10. period is uniform between 0 and 10, and the cost parameters are

- Selling price per unit $2

- Purchase price per unit $1

- Storage cost per unit per month $0.10

- Penalty cost per unit and per month $3

- Discount factor = 0.8

Determine the optimal inventory policy for the two periods, assuming that the starting inventory for period 1 is zero. initial inventory for period 1 is zero.

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