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Unformatted text preview: ost, backorder cost, loss of goodwill must be
Suppose that our newsstand is selling a book that is
ordered monthly. Copies of unsold books are still kept on
shelves at the end of the month for future sales. If the
book is sold-out, then the demand is backordered till the
soldend of the month. Book is bought at $1.15 and sold for
$2.75. Loss of goodwill costs 50cents per book. Monthly
demand is approximated normally with mean 18 and
std.dev. of 6 units. APR is set at 20%....
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This document was uploaded on 03/23/2014.
- Spring '14