The news vendor model does not consider ordering costs

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Reference no: EM132249643

The managerial R,Q model is called “managerial” because it should be used by managers. TRUE/FALSE

The news vendor model does not consider ordering costs since it is assumed that the cost of placing an order is zero. TRUE/FALSE

In a newsvendor context, the cost of overstocking per unit can be computed as follows:

Purchase cost – sales price + disposal cost

Order placement cost + inventory holding cost – stockout cost

Disposal cost – salvage value + purchase cost

Salvage value + sales price – purchase cost

What is the objective of a newsvendor model?

Maximize customer sales

Minimize inventory levels

Minimize the sum of the costs of over- and understocking

Minimize the sum of ordering and holding costs

Reference no: EM132249643

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