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Expected Overstock from an Order

Assume demand to be normally distributed, with a mean p and standard deviation r. Obtain an expression for the expected overstock if 0 units are ordered. [Pg.396]

If 0 units are ordered, an overstock results only if demand is x 0. We thus have [Pg.396]

Using Equation 13.8, we thus obtain Expected overstock = OFs [Pg.397]


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