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Exercise 9: The Newsvendor ProblemAnewsvendorpurchasesnewspapersfor$0.15eachatthestartofeachdayandthensells…

Exercise 9: The Newsvendor ProblemAnewsvendorpurchasesnewspapersfor$0.15eachatthestartofeachdayandthensells themonthecornerfor$0.50.Anypapersleftoverattheendofthedayaresoldfor$0.05eachto arecycler.Ifthenewsvendorsellsoutduringtheday,thereisnoopportunitytogetadditional papers.Constructaspreadsheetthatcalculatesthenewsvendor’sprofitforanynumberofpapers purchasedatthebeginningofthedayandanynumberofpaperswantedduringthecourseofthe day.(Noticethatthenumberofnewspaperswantedduringthedaymayexceedthenumberof newspaperspurchasedatthebeginningoftheday,butthenewsvendorwillrealizesalesforonly thedemandthatcanbesatisfiedwithanewspaper.)Setupyourspreadsheetsothatthenumber ofnewspaperspurchasediscontainedinonecellandthenumberofnewspapersdemandedis contained inanother:Number of newspapers purchased =0Number of newspapers demanded =01.Whatistheprofitforthefollowingfourscenarios?Scenario 1Scenario 2Scenario 3Scenario 4Papers purchased80809090Papers demanded60100601002.PrepareaChartofProfitasafunctionofDemandassumingthenewsvendorpurchases90 papers.

 

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