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Z-Chart & Loss Function Tables

The document defines two key concepts: 1) F(Z) represents the probability that a variable from a standard normal distribution will be less than or equal to Z, which also represents the service level for an order quantity with a z-value of Z. 2) L(Z) is the standard loss function, which is the expected number of lost sales as a fraction of the standard deviation. The actual lost sales is equal to L(Z) multiplied by the standard deviation of demand. 3) The document also provides a table that lists common service levels (75%, 90%, 95%, 99%) and their corresponding z-values and L(Z) values.

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9K views1 page

Z-Chart & Loss Function Tables

The document defines two key concepts: 1) F(Z) represents the probability that a variable from a standard normal distribution will be less than or equal to Z, which also represents the service level for an order quantity with a z-value of Z. 2) L(Z) is the standard loss function, which is the expected number of lost sales as a fraction of the standard deviation. The actual lost sales is equal to L(Z) multiplied by the standard deviation of demand. 3) The document also provides a table that lists common service levels (75%, 90%, 95%, 99%) and their corresponding z-values and L(Z) values.

Uploaded by

gkk82
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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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

F(Z)

L(Z)

F(Z)

L(Z)

F(Z)

L(Z)

F(Z)

L(Z)

-3.00
-2.96
-2.92
-2.88
-2.84
-2.80
-2.76
-2.72
-2.68
-2.64
-2.60
-2.56
-2.52
-2.48
-2.44
-2.40
-2.36
-2.32
-2.28
-2.24
-2.20
-2.16
-2.12
-2.08
-2.04
-2.00
-1.96
-1.92
-1.88
-1.84
-1.80
-1.76
-1.72
-1.68
-1.64
-1.60
-1.56
-1.52

0.0013
0.0015
0.0018
0.0020
0.0023
0.0026
0.0029
0.0033
0.0037
0.0041
0.0047
0.0052
0.0059
0.0066
0.0073
0.0082
0.0091
0.0102
0.0113
0.0125
0.0139
0.0154
0.0170
0.0188
0.0207
0.0228
0.0250
0.0274
0.0301
0.0329
0.0359
0.0392
0.0427
0.0465
0.0505
0.0548
0.0594
0.0643

3.000
2.960
2.921
2.881
2.841
2.801
2.761
2.721
2.681
2.641
2.601
2.562
2.522
2.482
2.442
2.403
2.363
2.323
2.284
2.244
2.205
2.165
2.126
2.087
2.048
2.008
1.969
1.930
1.892
1.853
1.814
1.776
1.737
1.699
1.661
1.623
1.586
1.548

-1.48
-1.44
-1.40
-1.36
-1.32
-1.28
-1.24
-1.20
-1.16
-1.12
-1.08
-1.04
-1.00
-0.96
-0.92
-0.88
-0.84
-0.80
-0.76
-0.72
-0.68
-0.64
-0.60
-0.56
-0.52
-0.48
-0.44
-0.40
-0.36
-0.32
-0.28
-0.24
-0.20
-0.16
-0.12
-0.08
-0.04
0.00

0.0694
0.0749
0.0808
0.0869
0.0934
0.1003
0.1075
0.1151
0.1230
0.1314
0.1401
0.1492
0.1587
0.1685
0.1788
0.1894
0.2005
0.2119
0.2236
0.2358
0.2483
0.2611
0.2743
0.2877
0.3015
0.3156
0.3300
0.3446
0.3594
0.3745
0.3897
0.4052
0.4207
0.4364
0.4522
0.4681
0.4840
0.5000

1.511
1.474
1.437
1.400
1.364
1.327
1.292
1.256
1.221
1.186
1.151
1.117
1.083
1.050
1.017
0.984
0.952
0.920
0.889
0.858
0.828
0.798
0.769
0.740
0.712
0.684
0.657
0.630
0.605
0.579
0.554
0.530
0.507
0.484
0.462
0.440
0.419
0.399

0.04
0.08
0.12
0.16
0.20
0.24
0.28
0.32
0.36
0.40
0.44
0.48
0.52
0.56
0.60
0.64
0.68
0.72
0.76
0.80
0.84
0.88
0.92
0.96
1.00
1.04
1.08
1.12
1.16
1.20
1.24
1.28
1.32
1.36
1.40
1.44
1.48
1.52

0.5160
0.5319
0.5478
0.5636
0.5793
0.5948
0.6103
0.6255
0.6406
0.6554
0.6700
0.6844
0.6985
0.7123
0.7257
0.7389
0.7517
0.7642
0.7764
0.7881
0.7995
0.8106
0.8212
0.8315
0.8413
0.8508
0.8599
0.8686
0.8770
0.8849
0.8925
0.8997
0.9066
0.9131
0.9192
0.9251
0.9306
0.9357

0.379
0.360
0.342
0.324
0.307
0.290
0.274
0.259
0.245
0.230
0.217
0.204
0.192
0.180
0.169
0.158
0.148
0.138
0.129
0.120
0.112
0.104
0.097
0.090
0.083
0.077
0.071
0.066
0.061
0.056
0.052
0.047
0.044
0.040
0.037
0.034
0.031
0.028

1.56
1.60
1.64
1.68
1.72
1.76
1.80
1.84
1.88
1.92
1.96
2.00
2.04
2.08
2.12
2.16
2.20
2.24
2.28
2.32
2.36
2.40
2.44
2.48
2.52
2.56
2.60
2.64
2.68
2.72
2.76
2.80
2.84
2.88
2.92
2.96
3.00

0.9406
0.9452
0.9495
0.9535
0.9573
0.9608
0.9641
0.9671
0.9699
0.9726
0.9750
0.9772
0.9793
0.9812
0.9830
0.9846
0.9861
0.9875
0.9887
0.9898
0.9909
0.9918
0.9927
0.9934
0.9941
0.9948
0.9953
0.9959
0.9963
0.9967
0.9971
0.9974
0.9977
0.9980
0.9982
0.9985
0.9987

0.026
0.023
0.021
0.019
0.017
0.016
0.014
0.013
0.012
0.010
0.009
0.008
0.008
0.007
0.006
0.005
0.005
0.004
0.004
0.003
0.003
0.003
0.002
0.002
0.002
0.002
0.001
0.001
0.001
0.001
0.001
0.001
0.001
0.001
0.001
0.000
0.000

Z & L(z) for special service levels


Service Level F(z)
75%
90%
95%
99%

F(Z) =
Service Level

0
Z

z-scale

z
0.67
1.28
1.64
2.33

L(z)
0.150
0.047
0.021
0.003

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