Summary: ISyE 3232 Solution to Assignment 4
February 23, 2010
1 Problem 1
(a)
F(q
) =
p - cv
p - sv
=
90 - 10
90 - 7
= 0.9639
The corresponding standard normal value is 1.80. Hence,
q
= 1.80(500, 000) + 1, 500, 000 = 2, 400, 000.
(b) As done above, the critical value is 1.97. Hence the optimal order up to
quantity is
q
= 1.80(100, 000) + 500, 000 = 680, 000.
(c) Let Fc(x) be the distribution function for part C. To satisfy the same fraction

Source: Ayhan, Hayriye - School of Industrial and Systems Engineering, Georgia Institute of Technology

Collections: Engineering