Lindo Systems

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 order-up-to 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