QUESTION $3$

$10$ points $($Extra Credit$)$

Refer to Ch $13-$ Newsvendor Model

Go back to the homework for Ch$.13($URL: How$-$To Check Homework Notes$).$ Review your responses to the questions and the Ch$.13$ solutions: XLS: Solutions: $13-$ Inventory Management Perishable, Solutions.

Your boss, Amanda, runs a bookstore. A wildly popular book is re$-$releasing at the same time as the movie adaptation. She is looking for a way to calculate maximized profit for future predicted demand while minimizing overstock. And, she is guaranteeing the book to be immediately available to customers, $98\%$ in$-$stock.

Write and e$-$mail to your boss, Amanda, regarding the newsvendor model

Describe the advantage of using the model?

Describe a weakness of the model given her desire to have a $98\%$ in$-$stock probability.