Consider the same supply chain setting as in Practice Problem $3$ in the Newsvendor lecture.

The wholesaler buys newspapers from the publisher and distribute them to local newsstands.

The wholesaler then sells the newspaper to the local newsvendors at $80$ cents per newspaper,

and the local newsvendors sell the newspaper to the final customer at $1$ dollar each. The

wholesaler wants to induce the newsvendor to purchase more newspapers, and thus agree to

buy back unsold newspapers at a price of $$0\mathrm{.}50/$newspaper$.$ What is the optimal service level

for the local newsvendor now?