Question

which of the following is a statistical inventory control model? a) base stock model b) News Vendor Model c) (q,r) model d)None of the above e) All of the above

Answer 1

The correct answer is b) News Vendor Model

Newsvendor Aspects

- Demands random

- leftovers sold at loss, it is too expensive to keep holding

- too few produced, will lose sale

- can forcast demand, but cant know exactly and therefore is normally distributed