Unformatted text preview: Demands not satisfied are lost (not carried over to future periods) and if inventory exceeds the limit of 4 units in any period, then these excess units are sold off at a price (income not cost) of $25. Demand in each period is a random variable with distribution: 10% 1, 25% 2, 35% 3, and 30% 4. Solve this problem assuming that there is no initial inventory....
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- Fall '10
- Probability, Probability distribution, Stochastic process, production setup cost, stochastic production model