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(Zavi, 1976) Consider the Economic Lot Size Model with infinite horizon and deterministic demand D items per unit of time. When the inventory level is zero, production of Q items starts at a rate of P items per unit of time, P ≥D. The set-up cost is K and holding cost is h / item/time. Every time production starts at a level of P items/time, we incur a cost of αP, α>0. (a) What is the optimal production rate? (b) Suppose that due to technological constraints, P must satisfy 2 D ≤P ≤3 D. What i
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