Measuring Demand Uncertainty The population correlation coefficient Px.y between two random vari- ables X and Y with expected values ur and y and standard deviations ox and oy is defined as: cov(X,Y) E[X-)Y-4y】 PX.Y= OxOY OxOY where E()is the expected value and cov is the covariance. Demand in two periods is independent if pii =0 Assume that demand during each of L periods is independent and normally distributed with a mean of D and a standard deviation of op then DL=D'L OL=VLOD SEIEE AU406 12+ - SEIEE AU406 Demand in two periods is independent if 𝜌𝑖𝑗 = 0 Assume that demand during each of 𝐿 periods is independent and normally distributed with a mean of 𝐷 and a standard deviation of 𝜎𝐷 then 12 Measuring Demand Uncertainty