Holding holding cost backorder cost loss of goodwill

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Unformatted text preview: ost, backorder cost, loss of goodwill must be integrated. Example Suppose 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.

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