(adsbygoogle = window.adsbygoogle || []).push({}); 1. The problem statement, all variables and given/known data

The cost function:

E(Cost)=E(F-LS)^{3}

F is for Finished goods

L is for Lambda

S is for Sales

After expanding the function, what assumption minimized this function with respect to F?

3. The attempt at a solution

F^{3}-3F^{2}LS+3F(LS)^{2}-(LS)^{3}

I know that I need to identify the terms that include both sales and inventories. The sales terms are the information needed for minimization.

Any ideas?

Thanks!

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# How to minimize the cost function

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