Single-Period Inventory Model
Certain characteristic's are associated with products that fall into the single-period inventory model. These include (a) the product is only viable for sale during a single time period; (b) the demand for the. product is highly variable, but follows a known probability distribution; and o(c) the scrap value of the product or the value of the product after the time period has elapsed is less than the initial cost of the product. The goal in determining the proper level of inventory for these products is to balance the gross profit generated by the sale of each unit with the cost incurred for each unit that is unsold after the time period has elapsed. Since the demand in these problems follows a probability distribution, we want to pick that level of inventory that maximizes our expected profit. When the probability distribution is discrete, we can solve the problem using n expected value matrix.