Unreliable newsboy problem with a forecast update. (English) Zbl 1242.90024
Summary: 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.
Keywords:
newsboy problem; forecast update; random yield; inventory management; stochastic dynamic programmingReferences:
| [1] | Burke, G. J.; Carrillo, J. E.; Vakharia, A. J., Sourcing decisions with stochastic supplier reliability and stochastic demand, Production and Operations Management, 18, 475-484 (2009) |
| [2] | Cachon, G.; Terwiesh, C., Matching Supply with Demand: An Introduction to Operations Management (2003), McGraw-Hill, Primis Custom Publishing |
| [3] | Choi, T. M.; Li, D.; Yan, H., Optimal two-stage ordering policy with Bayesian information updating, Journal of the Operational Research Society, 54, 846-859 (2003) · Zbl 1095.90504 |
| [4] | Choi, T. M.; Sethi, S. P., Innovative quick response programs: a review, International Journal of Production Economics, 127, 1-12 (2010) |
| [5] | Dada, M.; Petruzzi, N. C.; Schwarz, L. B., A newsvendor’s procurement problem when suppliers are unreliable, Manufacturing and Service Operations Management, 9, 9-32 (2007) |
| [6] | Fadıloğlu, M. M.; Berk, E.; Gürbüz, M. C., Supplier diversification under binomial yield, Operations Research Letters, 36, 539-542 (2008) · Zbl 1210.90004 |
| [7] | Fisher, M.; Raman, A., Reducing the cost of demand uncertainty through accurate response to early sales, Operations Research, 44, 87-99 (1996) · Zbl 0847.90065 |
| [8] | Gurnani, H.; Tang, C. S., Optimal ordering decisions with uncertain cost and demand forecast updating, Management Science, 45, 1456-1462 (1999) · Zbl 1231.90029 |
| [9] | Haksoz, C.; Seshadri, S., Monotone forecasts, Operations Research, 52, 478-486 (2004) · Zbl 1165.90317 |
| [10] | Hausman, W. H., Sequential decision problems a model to exploit existing forecast, Management Science, 16, 93-111 (1969) |
| [11] | Nurani, R. K.; Seshadri, S.; Shanthikumar, J. G., Optimal control of a single stage production system subject to random process shifts, Operations Research, 45, 713-724 (1997) · Zbl 0902.90049 |
| [12] | Parlar, M.; Wang, D., Diversification under yield randomness in inventory models, European Journal of Operational Research, 66, 52-64 (1993) · Zbl 0795.90013 |
| [13] | Sethi, S. P.; Yan, H.; Zhang, H.; Zhou, J., A supply chain with a service requirement for each market signal, Production and Operations Management, 16, 322-342 (2007) |
| [14] | Swaminathan, J. M.; Shanthikumar, J. G., Supplier diversification: effect of discrete demand, Operations Research Letters, 24, 213-221 (1999) · Zbl 0967.90006 |
| [15] | D. Tiwari, R. Patil, J. Shah, Numerical experiments of unreliable newsboy with forecast update. http://www.iimb.ernet.in/ janat/Numerical-Experiments.pdf; D. Tiwari, R. Patil, J. Shah, Numerical experiments of unreliable newsboy with forecast update. http://www.iimb.ernet.in/ janat/Numerical-Experiments.pdf · Zbl 1242.90024 |
| [16] | Wang, Y.; Tomlin, B., To wait or not to wait: optimal ordering under lead time uncertainty and forecast updating, Naval Research Logistics, 56, 766-779 (2009) · Zbl 1177.90046 |
| [17] | Wanke, P. F., The uniform distribution as a first practical approach to new product inventory management, International Journal of Production Economics, 114, 811-819 (2008) |
| [18] | Yano, C. A.; Lee, H. L., Lot sizing with random yield: a review, Operations Research, 43, 311-334 (1995) · Zbl 0832.90031 |
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. In some cases that data have been complemented/enhanced by data from zbMATH Open. This attempts to reflect the references listed in the original paper as accurately as possible without claiming completeness or a perfect matching.
