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Managing Inventories: The Newsvendor Model

Authors: Raz, Gal

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This note uses the traditional newsvendor model to present strategies for inventory management when demand is uncertain. Methods for determining the critical ratio of overage and underage costs and the optimal stock level are discussed.
Case Number: OM-1456
Author: Raz, Gal
Type: Technical Note
Length: 4 pages.
Category: Operations Management
Version: 1.0
Industry: N/A
Published: 4/11/11
Revision Date: 03/14/12
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