 The question here is, if we allow for back order, does the order quantity get smaller or larger? What about T? What about total relevant cost? So imagine I have a basic EOQ that does not allow for back orders. Now, if I suddenly, you know, the CEO says, OK, now we are going to allow for back orders. What is going to happen to my order quantity? Does it increase or decrease? Think about it for a few seconds. Also, what happens to my time periods, my cycle time? Does it increase or decrease? And also, does my cost go up and down? And this is a very, very important question. If you are able to solve that, that means you have a very good understanding of the whole mechanics of inventory management here. So think a few seconds about that. And I also have the formulas there for you. So this should also be very helpful. So let's see. Let's start with Q. Just looking at the formula, I see that Q star of plan back order model is Q star of EOQ times square root of 1 over CR, or critical ratio. Critical ratio, if you remember, was some value between 0 and 1. So when that's in denominator, it will make the final value bigger because 1 over a value that's less than 1 is going to be a value that's bigger than 1. We can simply replace 0.9 for CR and see what happens. A square root of a value that's bigger than 1 is still going to be bigger than 1. Again, you can verify that by a number. So Q star times something that's bigger than 1 is going to increase our order quantity. So basically, if you allow for back order, you will order bigger lots. If you order bigger lots, they will last longer too, right? Because we haven't said anything changes with the demand. So demand is stable. You're just ordering more. It will last longer too. So your T will go up as well. You can also verify that by the formula. So T is just Q divided by D. If Q goes up, T goes up too. Now what happens to total relevant cost? This is a very hard question to answer from the formula. On the formula you have, for example, in the middle, you see Q minus B. Q goes up in the planned back order model. You also have B, which is my back order amount, which is a positive value. So which one is bigger? Both of them are increasing. We don't know which way it will go at the end, but we can infer it from just the logic. Imagine previously CEO was telling me, hey, you're not allowed to allow any back order. And then the cost I realized was, let's say, $1,000. Today the CEO tells me you can't allow for back order, but it's your choice. I'm just letting you do it if it helps. When I model that problem and minimize cost, the total cost that comes out of it should not be any worse than EOQ. Why is that? Because I'm just giving my mathematical model more flexibility, more freedom to search for better answers. So it should never get worse. If it's worse, it will just set our back order level to zero. I would say that even though you can use any back order, back orders are not economical right now, so the zero back order will be chosen. So anyways, the model will adjust itself, so it's never worse. If anything, it will get better because now you have the option, you have more options. If the cost of back order is not too much, you can allow for a little back order and save some money there. So total relevant cost should stay the same or go up. If you have a lot of time and a lot of patience and a lot of mathematical skills, you can replace all the new Q and new B in that formula and verify it yourself. But I'm just giving you a simpler logical explanation. Whenever you allow your model more flexibility, you give yourself more options, you can't be worse.