From the course: Excel Supply Chain Analysis: Solving Inventory Problems

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Incorporate salvage value into your analysis

Incorporate salvage value into your analysis - Microsoft Excel Tutorial

From the course: Excel Supply Chain Analysis: Solving Inventory Problems

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Incorporate salvage value into your analysis

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- [Instructor] So far in this chapter, we have assumed that an item you can't sell immediately has no value. For a T-shirt example, though, that probably isn't the case, some customers will still want to buy the shirt, though perhaps at a lower price, even if they can't buy it at the conference. That lower price is called it the items salvage value. In this movie, I will show you how to incorporate salvage value, into your order quantity analysis. My sample file is 03 06 Salvage, and you can find it in the chapter three folder of the exercise files collection. If you watched the previous movie, the data in this example will look very familiar. We're assuming that we have an average demand or expected demand of 1800 shirts for this conference with a standard deviation of 600. It costs us $7.50 to have a shirt manufacturer, and we sell them for $20. What's new is that if we can't sell a shirt at our conference, we…

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