A possible difficulty with the model of the previous is that the setup cost after an idle period is always the same, regardless of which (nondummy) product was manufactured last. How can the model be...

A possible difficulty with the model of the previous is that the

setup cost after an idle period is always the same, regardless of which (nondummy) product was manufactured last. How can the model be modified

to allow setup cost to depend on the last nondummy product? Hint: Define

several dummy products. For example, let yt = −i indicate that no product

is manufactured in peropd t, and the last product manufactured is i.