Question: Using data in the past we know than the demand for a product that is purchase at the beginning of each period follows a normal
Using data in the past we know than the demand for a product that is purchase at the beginning of each period follows a normal distribution with a = 20 and = 4. The cost of the product is $ 1.00 and it sells for $ 3.00. At the end of period, if the product did not sell, you can recycle at a cost of salvation ("Salvage value") of $ 0.25. What would be the optimal value to sort or store?
I know that utilizing newsvendor we have F(Q) be 0.7273 and Q being 22.4 or 22 but I need to know the process for Q. i have tried everything and it doesn't make sense to me.
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
