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Determine the optimal ordering policy in the case of a single period inventory model with no setup cost instantaneous stock replenishment and amount demanded is a continuous random variable.

In this question I am confused about whether the question is asking about deterministic model or stochastic models , because generally if demand is variable as given in the question then it must be stochastic, but I am not able to understand the significance of information regarding the setup cost and 'single period inventory model'.

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  • $\begingroup$ I think the model should be deterministic. And at a single period inventory you order once only and not multiply times. Hint: If the length of the period is $T^*$ and the order quantity is $Q^*$ than the slope of the quantity is consstantly $-\frac{Q^*}{T^*}$. So the function for the inventory quantity is $Q(t)=-\frac{Q^*}{T^*}\cdot t+Q^*$ $\endgroup$ Commented Jun 13, 2021 at 4:25
  • $\begingroup$ @callculus hey could you please elaborate, I am having a lot of problems in inventory models $\endgroup$
    – simran
    Commented Jun 15, 2021 at 5:45

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