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A gasoline mini-mart orders 25 copies of a monthly magazine. Depending on the cover story, demand for the magazine varies. The gasoline mini-mart purchases the
A gasoline mini-mart orders 25 copies of a monthly magazine. Depending on the cover story, demand for the magazine varies. The gasoline mini-mart purchases the magazines for $1.50 and aells them for $4.00. Any magazines left over at the end of the month are donated to hospitals and other health-care facilites. Modify the news vendor example below to model this situation. Investiage the financial implications of this policy if the demand is expected to vary between 10 and 30 copies each month. How many must be sold to at least break even?
Newsvendor Model | |||
Data | |||
Selling price | $ 18.00 | ||
Cost | $ 12.00 | ||
Discount price | $ 9.00 | ||
Model | |||
Demand | 41 | ||
Purchase Quantity | 44 | ||
Quantity Sold | 41 | ||
Surplus Quantity | 3 | ||
Profit | $ 237.00 |
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