This paper investigates the single period inventory Newsboy problem in a general uncertain environment. Here it is assumed that the uncertainty appears in the market demand of the product. Uncertain demand is used to describe a subjective estimate (not estimated by random/fuzzy demand), linguistically expressed by ‘‘demand is about n’’. Using identification functions of the uncertain variable w...

Changes in production cost always lead to changes in wholesale and retail price. How to adjust the wholesale price, retail price and order quantity in order to derive an optimal strategy for the supplier and the retailer is one of the most perplexing problems. The purpose of this study is to develop a strategy to maximize the expected profit by simultaneously determining the adjustment ratio o...

This paper is a pedagogical approach for teaching the Newsboy inventory problem, in engineer and business school. In most cases, students study the value that maximizes the expected revenue. In some cases, they study the expected cost itself, but never the associated risk. This article studies the standard deviation of the expected cost for two classical models (including or not salvage revenue...

Recently, Lee and Hsu (2011) study the advertising effect on the distribution-free newsboy problem. In one of their results, they show that the optimal expenditure on advertising, the optimal order quantity and the optimal lower bound on the expected profit increase with the advertising effect parameters. Although this result holds in general, it requires additional assumptions. In this note we...

We introduce a technique called Concave, Adaptive Value Estimation (CAVE) to approximate recourse functions found in stochastic programs. CAVE constructs a sequence of concave (or convex) piecewise-linear approximations using sample gradients of the recourse function at di erent points in the domain. The result is a nonlinear approximation that is more responsive than traditional stochastic qua...

Newsboy models have wide applications in solving real-world inventory problems. This paper analyzes the optimal inventory policy for the single-order newsboy problem with fuzzy demand and quantity discounts. The availability of the quantity discount causes the analysis of the associated model to be more complex, and the proposed solution is based on the ranking of fuzzy numbers and optimization...

This note considers an N -stage serial production/inventory system where materials flow from one stage to another in fixed batches. Linear holding and penalty costs (for backorders) are assumed. By Chen [2000], echelon stock (R,nQ) policies are optimal for such systems. Based on the results of Chen [1998], we show that the optimal reorder levels satisfy newsboy inequalities (equalities) when th...

The hybrid metaheuristics algorithms (HMHAs) have gained a considerable attention for their capability to solve difficult problems in different fields of science. This chapter introduces some applications of HMHAs in solving inventory theory problems. Three basic inventory problems, joint replenishment EOQ problem, newsboy problem, and stochastic review problem, in certain and uncertain environ...

In this paper the real-world occurrence of the multiple-product multiple-constraint single period newsboy problem with two objectives, in which there is incremental discounts on the purchasing prices, is investigated. The constraints are the warehouse capacity and the batch forms of the order placements. The first objective of this problem is to find the order quantities such that the expected ...