1. Derive a formula for the following quantities for a production order quantity (POQ) model (a.k.a EPQ model) with planned shortages.
(a) Size of optimal production quantity
(b) Maximum on-hand inventory level
(c) Average on-hand inventory level
(d) Optimal length of each cycle
(e) Fraction of a cycle we produce
(f) Fraction of a cycle we do not produce
(g) Optimal amount of backorder (quantity of backlogged items) (h) Optimal total cost
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