Open AccessAnalysis of the Newsboy Problem subject to price dependent demand and multiple discounts
Author(s) -
Shouyu Ma,
Zied Jemaı̈,
Evren Şahin,
Yves Dallery
Publication year - 2018
Publication title -
journal of industrial and management optimization
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.325
H-Index - 32
eISSN - 1553-166X
pISSN - 1547-5816
DOI - 10.3934/jimo.2017083
Subject(s) - newsvendor model , context (archaeology) , multiplicative function , computer science , scheme (mathematics) , order (exchange) , vendor , term (time) , mathematical optimization , microeconomics , economics , econometrics , mathematics , supply chain , marketing , business , paleontology , mathematical analysis , physics , finance , quantum mechanics , biology
International audienceExisting papers on the Newsboy Problem that deal with price dependent demand and multiple discounts often analyze those two problems separately. This paper considers a setting where price dependence and multiple discounts are observed simultaneously, as is the case of the apparel industry. Henceforth, we analyze the optimal order quantity, initial selling price and discount scheme in the News-Vendor Problem context. The term of discount scheme is often used to specify the number of discounts as well as the discount percentages. We present a solution procedure of the problem with general demand distributions and two types of price-dependent demand: additive case and multiplicative case. We provide interesting insights based on a numerical study. An approximation method is proposed which confirms our numerical results