How Many Donuts Should I Buy?
Our recent Thanksgiving dinner included a 19-pound roasted turkey. We ate about one-third of the turkey and refrigerated the remainder, as the Pilgrims did so long ago. On Black Friday, my stepmother returned from a trip to the grocery store and remarked that whole turkeys – already quite affordable before the holiday – were now […]
Purchasing Decisions For Perishable Inventory: The Newsvendor Model
In supply chain management, the newsvendor problem describes an inventory purchasing decision where: Inventory is highly perishable (e.g., they can’t be sold tomorrow, like a newspaper) Demand is uncertain There are costs associated both with overstocking and understocking relative to demand There may be a lost sales penalty associated for unmet demand There may be […]