Dec 31, 1954
Published in: Management Science, v. 2, no. 4, July 1956, p. 313-326
Posted on RAND.org on February 20, 2015
This paper describes the application of the technique of simple "marginal analysis" to an Air Force problem and suggests that a similar application may be useful in many industrial situations. Examples of such industrial problems are also presented. The class of problems discussed can be described as those in which the demand or need for each of several alternative commodities during a specified period of time can be expressed in terms of a probability distribution. Given that the needs can only be met from a package of such commodities of specified total cost, the problem is to select the composition of commodities to be put into the package so that the number of unsatisfied demands or shortages will be minimized.