Z-Chart  Loss Function

Z-Chart Loss Function PowerPoint PPT Presentation


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Z-Chart Loss Function

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1. Z-Chart & Loss Function F(Z) is the probability that a variable from a standard normal distribution will be less than or equal to Z, or alternately, the service level for a quantity ordered with a z-value of Z. L(Z) is the standard loss function, i.e. the expected number of lost sales as a fraction of the standard deviation. Hence, the lost sales = L(Z) x sDEMAND

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