Suppose the newsvendor model describes a firm’s operations decision. Is it possible to have positive stockout probability and positive expected leftover inventory? Choose the best answer. 

a. No. If there is leftover inventory, then a stockout doesn’t occur. 

b. No. If the stockout probability is positive, then expected inventory must be negative.

c. No. Actual demand can differ from sales. 

d. Yes. A firm does not stock out and have leftover inventory at the same time, but the stockout probability can be positive even though there is positive expected leftover inventory. 

e. Yes, as long as the underage cost is greater than the overage cost