The curve below shows the probability distribution for a
newsvendor’s daily customer demand for a newspaper. The newsvendor purchases
newspapers at the beginning of the day, sells the papers during the day, and at
the end of the day, collects a salvage value
for each unsold paper.
for each unsold paper.
$0
$0
Z-score =
Reset Inputs
In this case, the demand distribution is normal, with a
mean of 50 newspapers and a standard deviation of 10 newspapers.
Optimal Stocking Quantity = 10
newspapers
When calculating initial stock level, round up.