Newsboy inventory problem

Series

Abstract

A definition and classical formulation of the newsboy inventory model as a profit maximization problem is provided. The structure of the optimal stocking policy is given. Alternative formulations of mean-variance, down-side risk, VaR (value-at-risk), and CVaR (conditional value-at-risk) for general demand distributions and a minimax formulation for the distribution-free newsboy model are also presented. Demand estimation in the presence of fully observable and censored sales is discussed from the frequentist and Bayesian perspectives. Explicit formulas are provided for Bayesian updating of a comprehensive set of demand functions.

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Publisher

John Wiley & Sons

Course

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Book Title

Encyclopedia of statistical sciences: Mizutani distribution to nyquist frequency

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Citation

Published Version (Please cite this version)

Language

English