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Stochastic Cost-Volume-Profit Analysis: Satisficing with Short Product Lives

  • Kenneth P. Gee
Chapter

Abstract

1. The initial step is to define symbols as follows: Let:

c

represent the contribution margin per dozen oysters sold to hotels and restaurants

h

represent the loss per dozen oysters sold for fish bait

s

represent the contribution lost per dozen oysters which are ordered but cannot be supplied

µ

represent the mean weekly demand (in dozens of oysters)

σ

represent the standard deviation of weekly demand

F

represent the cost per week of leasing oyster freezing equipment

P(DX

represent the probability that demand will not fall below X dozen oysters in any given week

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Copyright information

© Kenneth P. Gee 1986

Authors and Affiliations

  • Kenneth P. Gee
    • 1
  1. 1.Department of Business and AdministrationUniversity of SalfordUK

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