Question: Using the newsvendor model, it can be concluded that a very high profit margin for the product along with a very high probability of permanent

Using the newsvendor model, it can be concluded that a very high profit margin for the product along with a very high probability of permanent lost sales would be required to justify the addition of so much capacity. Using the $

300

million cost of the machinery and $

0

salvage value given in the reading, use the newsvendor model to confirm this conclusion

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