Simon from Elizabeth College, Guensey and Andrei from
Tudor Vianu National College, Romania both solved this
problem using geometric series. Here is Simon's solution:
The equation to show stock levels in week
is:
Substituting for
and simplifying:
Originally there was no stock so the initial condition is
.
To make the expressions easier to read we write
.
Writing
in terms of
:
Summing this geometric series
To find the limit of
over a very long period of time, as
, we have
and so
The company should ensure that they have enough warehouse space for
items. However, the chances are that sales and
production will vary during the year, and therefore they should
ensure that they have a buffer zone so that they can have more stock
if necessary. Also, they are unlikely to be in business for an
infinite length of time and therefore should cater said limit to
their needs based on the financial situation.