This paper would firstly introduce the Single-Period Inventory Model, a basic method of inventory control. By analyzing Newsvendor Problem which is simplified situation storing inventories, this discover using normal distribution analysis to solve problem. Then, promote adoption into realistic problems and discuss its utility. Secondly, topic expanded Multi-Period System. system focus on more s...

W consider a newsvendor who dynamically updates her forecast of the market demand over a finite planning horizon. The forecast evolves according to the martingale model of forecast evolution (MMFE). The newsvendor can place multiple orders with increasing ordering cost over time to satisfy demand that realizes at the end of the planning horizon. In this context, we explore the trade-off between...

Most systems are characterized by uncertainties that cause throughput to be highly variable, for example, many modern production processes and services are substantially affected by random yields. When yield is random, not only is the usable quantity uncertain, but the random yield reduces usable capacity and throughput in the system. For these reasons, strategies are needed that incorporate ra...

In this paper, we consider a newsvendor who is going to invest on dedicated or flexible capacity, our goal is to find the optimal investment policy to maximize total profit while the newsvendor faces uncertainty in lead time and demand simultaneously. As highlighted in literature, demand is stochastic, while lead time is constant. However, in reality lead time uncertainty decreases newsvendor's...

A number of experimental newsvendor studies have shown that human subjects make decisions which coincide with a “pull-to-center” effect. In general, three behavioral theories have been proposed in the literature to explain this behavior: bounded rationality, mean anchoring, and minimizing ex post inventory regret. Unfortunately, these models generate similar predictions under symmetric demand d...

We introduce a class of models, called newsvendor networks, that allow for multiple products and multiple processing and storage points and investigate how their single-period properties extend to dynamic settings. Such models provide a parsimonious framework to study various problems of stochastic capacity investment and inventory procurement. Newsvendor networks can feature commonality, ßexib...

In this paper, we study optimal contract problems for online display advertisements with pay-per-view pricing scheme. We first provide and analyze a single contract model, which is shown to be equivalent to the newsvendor problem. We then consider a stochastic optimization problem with two different advertisements and show that a contract to display both of them is not optimal. However, we show...

In this paper, we address a surgery capacity sharing problem with multiple hospitals, and formulate a model where hospitals who have their own capacity (the Operating Room) locally. Each hospital has several surgery teams facing random demands and seeks appropriate capacities to accommodate the demands, so that its total profit is maximized. We first study the allocation of available surgery ca...

We present an extension to the multi-product newsvendor problem by incorporating the retailer’s pricing decision as well as considering supplier quantity discount. The objective is to maximize the expected profit of the retailer through jointly determining the ordering quantities and selling prices for the products, subject to multiple capacity constraints. We formulate the problem as a General...