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A Simple Inventory Example
• Consider a retailer that sells ski-jackets.
• The sales season is very short and the items have to be ordered
in advance.
• The demand for green jackets are uniformly distributed between 0
and 100.
• Assume you order Q=40, 50, or 80 jackets in advance, what is the
expected sales in each case?
A Simple Inventory Example
• Consider a retailer that sells ski-jackets.
• The sales season is very short and the items have to be ordered
in advance.
• What if the probability distribution of the demand for green jackets
were more complicated, as the demand here is actually a function
of the weather?
• Assume you order Q=40, 50, or 80 jackets in advance, what is the
expected sales in each case?
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