Inventory Turnover Model

 

Inventory Turnover

In business and finance, ITO is one of the parameters to represent the selling of inventory in or usage of inventory in a specific time like one year. The inventory turnover equation is equal to the products price divided by average inventory.

Model

            An ITO model for MELROSE is as follows

 

One-dimensional Ito equation

 dy = a(y) dt + dW (t) ----------equation (1)

 

The above equation is used to conduct the change of the scalar diffusive Markov process Y (t). A function a(y) is a drift coefficient and 9 b(y) is known as diffusion coefficients, respectively, and 10 Wiener operations or process is represented by W (t).

 

             ----------equation (2)

 

 

This above equation is known as Fokker-Planck equation and associated with one dimensional ito equation. This equation helps us to determine the role of distribution function