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Mathematics, 20.08.2021 02:00 biancasamadp3usfw
The Newsvendor Problem describes a situation where a one-time purchase must be made when demand for the product is uncertain. Overbuy and you are left with the cost of unsold product; underbuy and you fail to meet the level of demand that is available. What could be more realistic? Below is the algebraic relationship that can be used to calculate net profit:
net profit = R*min(D, Q) + S*max(0, Q-D) - C*Q
C = cost of a unit
R = sales price of a unit
Q= units purchased (decision variable)
D= units demanded in a period (assume always > 0)
S = salvage value of an unsold unit
Categorize the following statements as true or false:
a. If Q
b. If Q>D, then min(D, Q) will be = 0.
c. If Q=D, then term C*Q will be greater than 0.
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