Determine the optimal stocking quantity


Problem: Suppose that h (by Anna Sheen) is fixed at 2.25 hours so that the demand is normal with mean of 575 and standard deviation of 100. Anna decides to buy back unsold copies of the Express at a salvage price of $0.6, and charges a wholesale price of $0.8 per newspaper that Ralph Armentrout orders. On worksheet Q5, use functions covered in the course to determine: a) the optimal stocking quantity (Q*) of the Express by Ralph under the above buyback contract, and b) the expected order fill rate given the Q*.

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Supply Chain Management: Determine the optimal stocking quantity
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