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Question No 1:

Cost function for a manufacturing model with shortages is as follows:

C(Q)=2C1D+C2DQ+Q(R−D)C32R

Find the optimal quantity Q and hence the optimal cost C.

Question No 2:

A factory has to supply 100 products per day to different destinations .It is noted that after the start of production, factory can produce 300 products per day. The holding and ordering costs are Rs 2/per day and Rs 30.How frequently should the manufacturing be made.

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