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Most applicable is the normal distribution the

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Unformatted text preview: le is the normal distribution. The Newsboy Model At At the start of each day, a newsboy must decide on the number of papers to purchase. Daily sales cannot be predicted exactly, and are represented by the random variable, D. Costs: Costs: co = unit cost of overage unit cu = unit cost of underage It It can be shown that the optimal number of papers to purchase is the fractile of the demand distribution given by F(Q*) = cu (cu + co ) 2 Newsboy Example When When demand is normal with µ = 11.73 and σ = 4.74,...
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