In most of the Walton Bookstore examples in Chapter 10, we assumed that there was a single

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In most of the Walton Bookstore examples in Chapter 10, we assumed that there was a single product.

Suppose instead that a company sells two competing products. Sales of either product tend to take away sales from the other product. That is, the demands for the two products are negatively correlated.

The company first places an order for each product. Then during a period of time, there is demand D1 for product 1 and demand D2 for product 2.

These demands are normally distributed with means 1000 and 1200 and standard deviations 250 and 350.

The correlation between D1 and D2 is r, where r is a negative number between 1 and

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Practical Management Science

ISBN: 9781111531317

4th Edition

Authors: Wayne L. Winston, S. Christian Albright

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