Single-period Inventory Analysis:
Economic Ordering Quantity for Seasonal Items
Often managers have to make decisions about inventory level over a very limited period, This is the case, for example with seasonal goods such as Christmas cards that should satisfy all demand in December, but any cards left in January have almost no value. These single-period decision models are phrased as the Newsboy Problem. For a newsboy who sells papers on a street corner, the demand is uncertain, and the newsboy must decide how many papers to buy from his supplier. If he buys too many papers he is left with unsold papers that have no value at the end of the day; if he buys too few papers he has lost the opportunity of making a higher profit.
Enter up-to-28 pairs of (number of possible item to sell, and their associated non-zero probabilities), together with the "not sold unit batch cost", and the "net profit of a batch sold" in the data-matrix, THEN click the Calculate button. Together with the "not sold unit batch cost", and the "net profit of a batch sold" Blank boxes are not included in the calculations.
In entering your data to move from cell to cell in the data-matrix use the Tab key not arrow or enter keys.
To edit your data, including add/change/delete, you do not have to click on the "clear" button, and re-enter your data all over again. You may simply add a pair of numbers to any blank cells, change a number to another in the same cell, or delete a number from a cell. After editing, then click the "calculate" button.
For Technical Details, Back to:
Decision Making in Economics and Finance
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Professor Hossein Arsham
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