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Newsvendor Model Calculator - Lognormal Distribution

Calculates the optimal inventory level for uncertain demand for a perishable product.

The demand follows a lognormal distribution with a mean of Dmean and standard deviation of Dsd.

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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 lognormal distribution with a mean demand of 50 and a standard deviation of 0.20, calculate the optimal inventory.

Value Key Display Description
.2 Dsd 0.20 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 44.65 Calculates the optimal inventory level.

 

Also see:
Newsvendor Model for a Uniform Distribution Formula Calculator
Newsvendor Model for a Normal Distribution Formula Calculator

Reference: Newsvendor Model - Wikipedia