The so-called newsvendor model compares the net salvage cost to the (opportunity) cost of stocking out (this opportunity cost is typically the unit contribution margin) and tells us whether to order more or less than the estimated average demand. If the net salvage cost is $15, but the opportunity cost of a lost sale is $10 should they stock more or less than the average? Group of answer choices They should stock exactly the average They should stock more than the average They should stock less than the average We don't have enough data to compute it

Answer rating: 100% (QA)

Based on the information provided Net salvage cost 15 Opportun... View the full answer