Unreliable newsboy problem with a forecast update

In this paper, we derive an optimal ordering policy for an unreliable newsboy who can place two sequential orders before the start of a single selling season by using a demand forecast update. Supply yield is modeled using a uniform distribution considering both the minimum order guarantee and the m...

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Bibliographic Details
Published in:Operations research letters 2011-07, Vol.39 (4), p.278-282
Main Authors: Tiwari, Divya, Patil, Rahul, Shah, Janat
Format: Article
Language:English
Subjects:
Applied sciences
Cost engineering
Exact sciences and technology
Forecast update
Inventory control, production control. Distribution
Inventory management
Logistics
Marketing
Mathematical models
Mathematical programming
Newsboy problem
Operational research and scientific management
Operational research. Management science
Operations research
Optimization
Policies
Random yield
Seasons
Stochastic dynamic programming
Suppliers
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Summary:In this paper, we derive an optimal ordering policy for an unreliable newsboy who can place two sequential orders before the start of a single selling season by using a demand forecast update. Supply yield is modeled using a uniform distribution considering both the minimum order guarantee and the maximum yield. Our results indicate that a firm should focus on increasing the minimum order guarantee from a first stage supplier to reduce its total supply chain cost.
ISSN:0167-6377
1872-7468
DOI:10.1016/j.orl.2011.04.001