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A newsvendor buys daily newspaper at the beginning of the day with a purchasing price $0.30/unit.

During the day, the newsvendor sells to customer with a selling price $1/unit; customer demand has a normal distribution with mean 100 and standard deviation 20.

At the end of the day, if there is unsold newspaper, the newsvendor can return them to the newspaper publisher with a salvage price $0.10/unit.

What is the optimal order (purchasing) quantity the newsvendor should buy at the beginning of the day? Please upload your answer Excel file to your detailed calculations and support.

    • 7 years ago
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