Solve the newsvendor problem. Probability Value 0.16 0.09 1 2 Optimal order quantity 0.16 Purchase cost c = 16 Selling price p = 50 Salvage value v= 11 What is the optimal order quantity? 0.22 4 0.26 10 5 0.11 6

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Solve the newsvendor problem.
Probability
Value
0.16 0.09
2
1
Optimal order quantity
0.16 0.22
3
4
Purchase cost c= 16
Selling price p = 50
Salvage value v= 11
What is the optimal order quantity?
8.26
5
0.11
6
Transcribed Image Text:Solve the newsvendor problem. Probability Value 0.16 0.09 2 1 Optimal order quantity 0.16 0.22 3 4 Purchase cost c= 16 Selling price p = 50 Salvage value v= 11 What is the optimal order quantity? 8.26 5 0.11 6
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