Question
A gasoline mini-mart orders copies of a monthly magazine. Depending on the cover story, demand for the magazine varies. The mini-mart purchases the magazines for
A gasoline mini-mart orders copies of a monthly magazine. Depending on the cover story, demand for the magazine varies. The mini-mart purchases the magazines for $ and sells them for $. Any magazines left over at the end of the month are donated to hospitals and other health care facilities. Modify the newsvendor example spreadsheet to model this situation. Use what-if analysis to investigate the financial implications of this policy if the demand is expected to vary between and copies each month
Newsvendor Model
| A | B | |
---|---|---|---|
1 | Newsvendor Model | ||
2 | |||
3 | Data | ||
4 | |||
5 | Selling price | $3.88 | |
6 | Cost | $1.73 | |
7 | Discount price | $0 | |
8 | |||
9 | Model | ||
0 | |||
11 | Demand | 10 | |
12 | Purchase Quantity | 24 | |
13 | |||
14 | Quantity Sold | ||
15 | Surplus Quantity | ||
16 | |||
17 | Profit |
The formula for the quantity sold is =MIN(B11,B12).
The formula for the surplus quantity is =MAX(0,B12-B11).
The formula for the profit is =B14*B5-B12*B6.
The demand must be at least ? copies for the gasoline mini-mart to break even.
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