Question 334677
Economic lot size model. 
d=daily demand rates, 
p=daily production rate, 
t=number of days for a production run. 
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The book saids that max. inventory is (p-d)t
If you produce p items and only sell d you
have p-d items left over each day.
If you have that for t days you have (p-d)t 
items in your inventory.
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t=q/p days. 
This defines a variable "q" as p*t, or the amount of
production in t days.
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Thus maximum inventory 
= (p-d)t =(p-d)(q/p)
You have substituted q/p for t
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= (1-d/p)q.
You have distributed the product to
get this final statement of # of items
in you inventory.
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Cheers,
Stan H.
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