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In the order up-to model, assume that the mean of demand in a
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In the order up-to model, assume that the mean of demand in a period remains the same

and the order up-to level is kept at a constant level. If the demand uncertainty (the standard

deviation of demand in each period) increases, then what happens


(i) The expected inventory at the end of each period would increase.
(ii) The expected inventory at the end of each period would decrease.
(iii) The expected inventory at the end of each period would remain unchanged.
(iv) The expected inventory at the end of each period may go up or down.


 







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