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W4a-Newsboy Excel Model and Solution

The document discusses a newsboy problem where the cost per unit is $1, the selling price is $2.50, and the variable cost is $0.80. The mean demand is 120 units with a standard deviation of 10. The critical ratio is 0.8824 and the critical z-value is 1.19. The optimal order quantity that minimizes total costs is 131.87 units. The overage and underage costs per unit are $0.20 and $1.50 respectively.

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99 views2 pages

W4a-Newsboy Excel Model and Solution

The document discusses a newsboy problem where the cost per unit is $1, the selling price is $2.50, and the variable cost is $0.80. The mean demand is 120 units with a standard deviation of 10. The critical ratio is 0.8824 and the critical z-value is 1.19. The optimal order quantity that minimizes total costs is 131.87 units. The overage and underage costs per unit are $0.20 and $1.50 respectively.

Uploaded by

masing4christ
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Newsboy problem

Costs and Prices


c $1.00
p $2.50
v $0.80
Mean 120
stdv 10

Critical Ratio
F(Q) 0.8824
z 1.19

Order Quantity
Q* 131.87
Over and Underage Costs
Co 0.20
Cu 1.50

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