Problem
You are a retailer. You buy a product at $3.00 from a supplier and sell it for $6.00. It costs the supplier $2.00. Unsold items can be marked down and sold for $1.50. Demand is normally distributed between with mean 200 and standard deviation 50.
Newsvendor Quantity: How many units should you stock? Why? How would the stock quantity change if demand is discrete uniformly distributed between 150 and 250.