3.3.4 Consider the inventory model of Section 3.3.1. Suppose that S D 3 and that the probability...

Question:

3.3.4 Consider the inventory model of Section 3.3.1. Suppose that S D 3 and that the probability distribution for demand is Prf D 0g D 0:1; Prf D 1g D 0:4;Prf D 2g D 0:3, and Prf D 3g D 0:2. Set up the corresponding transition probability matrix for the end-of-period inventory level Xn.

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