Q Consider two products A and B that have identical cost, retail price and demand parameters (distributions, which are assumed to be continuous distributions) and the same short selling season (the summer months from May through August. The newsvendor model is used to manage inventory for both products. Products A and B are to be discontinued at the end of the season this year. The leftovers of product A will be salvaged at 75% of the cost while the leftovers of product B will be salvaged at 80% of the cost. How do the optimal) best stocking quantities (order quantities) for these products compare?
