Journal
INTERNATIONAL JOURNAL OF SYSTEMS SCIENCE
Volume 43, Issue 3, Pages 491-498Publisher
TAYLOR & FRANCIS LTD
DOI: 10.1080/00207721.2010.517856
Keywords
price-dependent demand; inventory; random selling price
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Up to now, many newsboy problems have been considered in the stochastic inventory literature. Some assume that stochastic demand is independent of selling price (p) and others consider the demand as a function of stochastic shock factor and deterministic sales price. This article introduces a price-dependent demand with stochastic selling price into the classical Newsboy problem. The proposed model analyses the expected average profit for a general distribution function of p and obtains an optimal order size. Finally, the model is discussed for various appropriate distribution functions of p and illustrated with numerical examples.
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