How many books should Dan order if he wants to achieve a 95 percent in-stock probability?What is the cost of underestimation?
MGT 3501 – Practice Problems – Newsvendor Model 1. Johnson Electronics sells electrical and electronic components through catalogs. Catalogs are printed once every two years. Each printing run incurs a fixed cost of $25,000, with a variable production cost of $5 per catalog. Annual demand for catalogs is estimated to be normally distributed with a […]