Question: ( 2 0 points ) Consider a discrete time periodic inventory model and let n be the total demand in period n and let x
points Consider a discrete time periodic inventory model and let be the total demand in period and let be the inventory quantity on hand at the end of period Assume that inventory policy is used. That is if the end of period stock is not greater than then a quantity is immediately procured to bring the level up to If the end of period stock exceeds then no replenishment takes place. Suppose that and and dots, are independent random variables where
and for dots,
Then dots, is a Markov Chain.
First define states of the Markov chain then determine the transition probability matrix of the chain.
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