Supply Chain LabNewsvendor Game on a MapLab Home
Inventory & Ordering

Newsvendor Game on a Map

Decide how many units to stock at each store before demand is known. Use each store's + and - buttons (or Set optimal order), then press Simulate season to see your profit.

Profit (good match)
Loss (over / under stock)
Store · size = order qty

Season Result (all stores)

Total profit
$0
Service level
0%
Lost sales (units)
0
Leftover (units)
0
Optimal order per store uses the critical fractile Cu/(Cu+Co). Set economics below, then click Set optimal order or use each store's + / − buttons.

Economics (per unit)

Selling price (p)$12
Unit cost (c)$5
Salvage value (s)$2

Demand & order

Order policy
Custom order multiplier1.0×
Demand variability (CV)0.30
Each store has its own mean demand (shown on its label). Higher variability widens the gap between order and actual demand.

About this tool

The Newsvendor Problem

The concept

One chance to order before uncertain demand: too little loses sales, too much wastes stock.

How it works

The critical ratio of underage to overage cost sets the optimal service level and order.

Winning strategy

Order to the critical-ratio quantile - profit asymmetry, not the mean, drives the answer.

order to F^-1(Cu/(Cu+Co))
NewsvendorCritical ratioUnderage costOverage cost
Core idea: Newsvendor model