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Managing Inventories: The Newsvendor Model

Authors: Raz, Gal

Picture of Managing Inventories: The Newsvendor Model
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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
Type: Technical Note
Industry: N/A
Published: 4/11/11
Revision Date: 03/14/12
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