When there is probabilistic demand in a multiperiod model,the inventory level will not decrease smoothly and can fall below 0.

Question

Quizplus · Accepted Answer

Because there is probabilistic demand, the actual demand in each period is uncertain and can deviate from the expected value. This means that sometimes the demand will be higher than expected and sometimes lower, which can cause inventory levels to fluctuate and potentially drop below 0 in some periods.

When There Is Probabilistic Demand in a Multiperiod Model,the Inventory