Newsvendor Model Calculator - Normal Distribution
Calculates the optimal inventory level for uncertain demand for a perishable product.
The demand follows a normal distribution with a mean of Dmean and standard deviation of Dsd.
Formula: dMean+dSd*normsinv((fcPrice-fcCost)/fcPrice)
Q: The optimal inventory level.
price: The retail price.
cost: The purchase price.
Dmean: The mean of the demand.
Dsd: The standard deviation of the demand.
Example
For a retail price of $7, a cost of $5 where the demand follows a normal distribution with a mean demand of 50 and a standard deviation of 20, calculate the optimal inventory.
| Value | Key | Display | Description |
|---|---|---|---|
| 20 | Dsd | 20.00 | Stores the standard deviation of the demand. |
| 50 | Dmean | 50.00 | Stores the mean of the demand. |
| 5 | cost | 5.00 | Stores the purchase price. |
| 7 | price | 7.00 | Stores the retail price. |
| Q | 38.68 | Calculates the optimal inventory level. |
Also see:
Newsvendor Model for a Uniform Distribution Formula Calculator
Newsvendor Model for a Lognormal Distribution Formula Calculator
Reference: Newsvendor Model - Wikipedia