Two Critical Tasks

2 Some Preliminary Modeling Issues 3.2.1 Two Critical Tasks 

This last point allows us to reflect back the framework described earlier, contrasting non-stationary (i.e., time-varying) demand from stationary demand (i.e., constant across time). This distinction helps us decide how we should model demand. If demand is stationary, then the expectation of demand in all time periods in our decision horizon is unchanging. All we need to do, then, is to describe demand for some portion of our infinite decision horizon. Moreover, if demand is not known with certainty, then describing demand requires that we specify its probability distribution. If, however, demand is non-stationary, then our demand description task is more complicated. If demand is a spike, as described earlier, or occurs at only a small number of points across our decision horizon, then our task is similar to the infinite-horizon case. We must define a probability distribution that represents the extent of our knowledge of demand at each of the points in time 

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Name the two critical tasks necessary for building an inventory decision model and describe briefly how they are executed in general. 

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