What is the expression of the CSL

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Reference no: EM131777018

A manufacturer produces a product at a per unit cost c. The retailer acts as a newsvendor and pays a wholesale price, w, to the manufacturer for each unit and sells the product to the market at a selling price, r, per unit. For each product sold by the retailer on the market there is a probability of 20% that the product is returned by the consumer to the retailer for a full refund of the selling price, r. Returned products as well as excess inventory are salvaged by the retailer at a per unit value, s. The manufacturer offers a rebate, u, for each product sold, independently on whether the product is returned or not by the consumer to the retailer. What is the expression of the CSL?

Reference no: EM131777018

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