Please identify the optimal production quantity, i$.$e$.,$ the number of

catalogs to be printed, based on the optimal service level identified in the

previous question. Please explain your logic to show the work.Consider the same supply chain setting as in Practice Problem $3$ in the

Newsvendor lecture.

The wholesaler buys newspapers from the publisher and distributes them

to local newsstands. The wholesaler then sells the newspaper to the local

newsvendors at $80$ cents per newspaper, and the local newsvendors sell

the newspaper to the final customer at $1$ dollar each.

The wholesaler wants to induce the newsvendor to purchase more

newspapers, so agrees to buy back unsold newspapers at a price of

$$\frac{0\mathrm{.}50}{?}$ newspaper. What is the optimal service level for the local

newsvendor now?

Please identify $Cu($under$-$stocking cost$)$ and Co $($over$-$stocking cost$)$ to

calculate the critical ratio, i$.$e$.,$ the optimal service level. Please briefly

explain your calculation logic to show the work.

Hint: The buy$-$back price represents the salvage value of the unsold

newspapers.What is the optimal service level for the local newsvendors if now the

wholesaler agrees to buy back unsold newspapers at a price of

$$\frac{0\mathrm{.}75}{?}$ newspaper.?

Please identify $Cu($under$-$stocking cost$)$ and Co $($over$-$stocking cost$)$ to

calculate the critical ratio, i$.$e$.,$ the optimal service level. Please briefly

explain your calculation logic to show the work.We have figured out in class that the optimal service level of the entire

supply chain is $0\mathrm{.}80.$ This is the service level that maximizes the total

profit of the chain.

Based on the service level, between the two candidate buy$-$back prices,

$$\frac{0\mathrm{.}50}{?}$ newspaper and $$\frac{0\mathrm{.}75}{?}$ newspaper, which one would the wholesaler

choose to induce a higher total profit?Compared to a buy$-$back contract, a revenue$-$sharing contract is generally

better to incentivize local newsvendors to sell more newspapers.A family$-$run inn is considering the use of overbooking because the

frequency of no$-$shows listed below has left many rooms vacant

during the past summer season. Please calculate the cumulative

probability from the table.A family$-$run inn is considering the use of overbooking because the

frequency of no$-$shows listed below has left many rooms vacant

during the past summer season. An empty room represents an

opportunity cost of $$110,$ which is the average room rate.

Accommodating an overbooked guest to the nearby resort room is

expensive $($average room rate $$180)$ and the inn must pay the room

rate difference as its cost to "bump" a customer.

What is the optimal level of overbooking?

Please identify $Cu($under$-$stocking cost$)$ and Co $($over$-$stocking cost$)$

to calculate the critical ratio, i$.$e$.,$ the optimal service level.