# Probabilistic Inventory Models

• May 14th 2009, 11:05 PM
lhaero
Probabilistic Inventory Models
Hi, I have the following problem on Probabilistic Inventory Models to work and would appreciate any help that can be given:The campus bookstore must decide how many textbooks to order for a course that will be offered only once. The number of students who will take the course is a random variable D whose distribution can be approximated by a (continuous) uniform distribution on the interval [35,75]. After the course starts, the value of D becomes known. If D exceeds the number of books available, the known shortfall is made up by placing a rush order at a cost of \$150 plus \$5 per book over the normal ordering cost. If D is less than the stock on hand, the extra books are return for their original ordering cost less \$2 each. What is the order quantity that minimises the expected cost?
• May 15th 2009, 12:34 AM
matheagle
• May 15th 2009, 03:53 AM
mr fantastic
Quote:

Originally Posted by matheagle