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Preview division divides M proportional to preview demand, i.e., each SKU n 2N gets fraction
This method is included because it is used by the case company, in combination with Method 2. Preview division was previously pro posed by Chambers and Eglese (1988). However, they restrict the method to grouping SKUs per ‘product line', while here it can be applied for any chosen way of grouping.
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Part II The cost of equity (discount rate) can also be determined by using the Capital Asset Pricing Model (CAPM). Calculating the cost of equity using the CAPM model is often mor
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