Question: Parameter Notation Value Unit purchase cost (incl. transportation, etc.) C $ 290.0 Unit sales price SP $ 529.0 Unit salvage value G $ 149.9 Cost

Parameter Notation Value
Unit purchase cost (incl. transportation, etc.) C $ 290.0
Unit sales price SP $ 529.0
Unit salvage value G $ 149.9
Cost of overstocking Co $ 140.10
Cost of understocking Cu $ 239.00
Average demand/season D 12,642
Std. deviation of demand/season sD 3,900
Critical ratio F(Q*) 63%
Std. normal variate z 0.33
Newsvendor quantity Q 13940.8
Expected lost sales ELS 992.0
Expected sales ES 11650.0
Expected leftover inventory ELI 2290.8
Expected cost of understocking ECu $ 237,081.30
Expected cost of overstocking ECo $ 320,934.23
Expected total cost ETC $ 558,015.53
Expected cost of sales ECS $ 3,378,508.13
Expected revenue ER $ 6,162,864.84
Expected profit EP $ 6,129,602.47
3) How many units will the retailer expect to salvage at the end of the selling season?
Answer: units

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