MODEL:
DATA:
! The average demand;
MU = 144;
! Opportunity cost of each unit of lost demand;
P = 11;
! Cost/unit of excess inventory;
H = 5;
ENDDATA
! Calculate the orderupto point, S, using the
newsboy problem equation;
@PPS( MU, S) = P / ( P + H);
! PS is the expected profit of being at S;
PS = P * MU  H * (S MU)  (P + H) * @PPL(MU, S);
END
