The profit per replenishment period, ΠðQ ; p; TÞ, includes three
economic elements: the profit margin of sold units excluding
RT
holding cost, ðp−cÞQ ; the inventory holding costs, h 0 IðQ ; p; tÞdt,
and the fixed ordering cost, K. The objective function, profit per
unit time, which should be maximized with respect to the three
decision variables (Q, p and T) is: