
38 Fashion Retail Supply Chain Management
The product’s demand y follows a normal distribution with mean 100, and standard
deviation of 30. The optimal order quantity for this fashion product can be found as
follows:
First,
r − c
r − v
=
220 − 80
220 − 70
=93.3%.
Second, since the demand follows the normal distribution, we have the following
formula to find the inverse function of the cumulative distribution function:
If F(·) is a normal distribution with mean µ and variance σ
2
, then F
−1
(z) can be
expressed as: µ +σ
−1
(z), where
−1
(·) is the inverse function of the standard normal
cumulative distribution function.
Thus, the optimal ordering quantity for ...