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The

warehouse capacity of a given product is of 3 items at most. The daily

demand for this product is given by the following probability

distribution: p(0) = 0.3; p(1) =0.25, p(2)=0.25, p(3+)=0.2, where 3+

means 3 or more. When the remaining items at the end of a day are less

than 2, an order is made at the start of the next day to replenish the

level at 3 items (to be available at the start of the next day).

1. Provide a transition probability matrix on the inventory level of

this product at the start of each day, starting with 3 items.