Candidate Costs

Order One Cost

Ordering one unit avoids leftovers but risks missing demand.

highlighted = computed this step

Order one

For order quantity 1, there is no expected overage.

q=1q=1
Candidate costsEach row is recomputed from the demand distribution and mismatch costs.candidate expected costschosen q=2 by smaller-order tie ruleqE overE underE costcost bar101621/41/42chosen3102cost tie

Expected underage

Expected underage is 1.

E[underage]=1E[\text{underage}]=1
Candidate costsEach row is recomputed from the demand distribution and mismatch costs.candidate expected costschosen q=2 by smaller-order tie ruleqE overE underE costcost bar101621/41/42chosen3102cost tie

Expected overage

Expected overage is 0.

E[overage]=0E[\text{overage}]=0
Candidate costsEach row is recomputed from the demand distribution and mismatch costs.candidate expected costschosen q=2 by smaller-order tie ruleqE overE underE costcost bar101621/41/42chosen3102cost tie

Expected cost

Expected cost is 6.

E[cost]=6E[\text{cost}]=6
Candidate costsEach row is recomputed from the demand distribution and mismatch costs.candidate expected costschosen q=2 by smaller-order tie ruleqE overE underE costcost bar101621/41/42chosen3102cost tie