Assume a time interval T is given. Moreover assume that the setup cost is not constant but varies with the lapse of time. The present problem is to determine the inventory policy for the given T. How often the order is placed during T and how much is ordered at each ordering time point are our main themes. The authors solve these problems in the following ways. If frequency of orders for T is given arbitrarily, the ordering policy is to be planned by using the techniques of DP. By choosing a proper frequency of orders so that it may minimize the total inventory cost required during T, an optimal inventory policy for T is determined. Moreover, by applying DP some mathematical properties of this policy are examined. Even if exact mathematical expressions for frequency of orders and inventory cost are determined, their values are obtained. These become the merit of applying DP.
