This illustration shows how Buyback Price affects stocking quantity and profits in a single-period model. At the beginning of the day, the newsvendor purchases newspapers from the supplier for the Wholesale Price. During the day, he sells the papers to his customers. Finally, at the end of the day, he receives the Buyback Price, set by the supplier, for each unsold (salvaged) newspaper.

It costs $0.10 for the supplier to produce each newspaper, and the news vendor sells it at a fixed price of $1.00. Daily customer demand for newspapers is characterized by a mean of 525 and standard deviation of 100.

What combination of Wholesale Price and Buyback Price maximizes the Initial Order Quantity, Supplier Profit, Vendor Profit, and the Total Channel Profit?