In the single-period inventory model with probabilistic demand, A)surplus items are not allowed to be carried in future inventory. B)c_o = c_u. C)probabilities are used to calculate expected losses. D)All of these are correct.

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Quizplus · Accepted Answer

In the single-period inventory model with probabilistic demand, probabilities are indeed used to calculate expected losses, such as the expected shortage or overage costs. This model helps in decision-making under uncertainty by estimating the costs associated with different inventory levels based on the demand probabilities.

In the Single-Period Inventory Model with Probabilistic Demand