Question

A gasoline mini-mart orders 24 copies of a monthly magazine. Depending on the cover story, demand for the magazine varies. The mini-mart purchases the magazines for $1.63 and sells them for $3.78. Any magazines left over at the end of the month are donated to hospitals and other health care facilities. Modify the newsvendor example spreadsheet to model this situation. Use what-if analysis to investigate the financial implications of this policy if the demand is expected to vary between 10 and 30 copies each month. Click the icon to view the newsvendor example spreadsheet. The demand must be at least (Type a whole number.) copies for the gasoline mini-mart to break even.

Answer 1

Newsvendor Model
Data
Selling Price	$       3.78	$       3.78	$       3.78	$       3.78	$       3.78	$       3.78	$   3.78	$    3.78	$   3.78	$       3.78	$       3.78	$       3.78	$       3.78	$       3.78	$       3.78	$       3.78	$       3.78	$       3.78	$       3.78	$       3.78	$       3.78
cost	$       1.63	$       1.63	$       1.63	$       1.63	$       1.63	$       1.63	$   1.63	$    1.63	$   1.63	$       1.63	$       1.63	$       1.63	$       1.63	$       1.63	$       1.63	$       1.63	$       1.63	$       1.63	$       1.63	$       1.63	$       1.63
Discount Price	$           -	$           -	$           -	$           -	$           -	$           -	$        -	$         -	$        -	$           -	$           -	$           -	$           -	$           -	$           -	$           -	$           -	$           -	$           -	$           -	$           -
Model
Demand	10.00	11.00	12.00	13.00	14.00	15.00	16.00	17.00	18.00	19.00	20.00	21.00	22.00	23.00	24.00	25.00	26.00	27.00	28.00	29.00	30.00
Purchase Quantity	24.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00
Quantity Sold	10.00	11.00	12.00	13.00	14.00	15.00	16.00	17.00	18.00	19.00	20.00	21.00	22.00	23.00	24.00	24.00	24.00	24.00	24.00	24.00	24.00
Surplus Quantity	14.00	13.00	12.00	11.00	10.00	9.00	8.00	7.00	6.00	5.00	4.00	3.00	2.00	1.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Profit	$     -1.32	$       2.46	$       6.24	$    10.02	$    13.80	$    17.58	$ 21.36	$ 25.14	$ 28.92	$    32.70	$    36.48	$    40.26	$    44.04	$    47.82	$    51.60	$    51.60	$    51.60	$    51.60	$    51.60	$    51.60	$    51.60