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A generalized single product and single‐period inventory problem with non‐linear parameters
Author(s) -
Luo Kai,
Kerbache Laoucine,
Menezes Mozart B. C.,
van Delft Christian
Publication year - 2012
Publication title -
international transactions in operational research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.032
H-Index - 52
eISSN - 1475-3995
pISSN - 0969-6016
DOI - 10.1111/j.1475-3995.2011.00829.x
Subject(s) - newsvendor model , decision maker , mathematical optimization , concave function , linear programming , mathematics , profit (economics) , product (mathematics) , computer science , function (biology) , optimization problem , operations research , economics , supply chain , geometry , regular polygon , political science , law , microeconomics , evolutionary biology , biology
In this paper, we extend the study of the classical single‐period newsboy inventory problem by considering costs that are non‐linear functions of the decision variable. We assume that the demand probability density function is known to the decision maker. We prove that, under some much more relaxed conditions, the total expected profit function remains concave and classical optimization methods can thus be used to obtain the global optimal solution. After that, we provide numerical examples for illustrative purpose.