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Multi-product newsboy problem with limited capacity and outsourcing

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  • Zhang, Bin
  • Du, Shaofu

Abstract

This paper considers a multi-product newsboy system that produces multiple products for fulfilling independently uncertain demands, which share the same production capacity. To deal with possible shortage of limited capacity, productions can be outsourced. We consider two outsourcing strategies: zero lead time outsourcing, and nonzero lead time outsourcing. The structural properties and solution procedures for the profit-maximization models are developed. Numerical results are provided for obtaining some managerial insights.

Suggested Citation

  • Zhang, Bin & Du, Shaofu, 2010. "Multi-product newsboy problem with limited capacity and outsourcing," European Journal of Operational Research, Elsevier, vol. 202(1), pages 107-113, April.
    • Handle: RePEc:eee:ejores:v:202:y:2010:i:1:p:107-113
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    Cited by:

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    6. Gunasekaran, Angappa & Irani, Zahir & Choy, King-Lun & Filippi, Lionel & Papadopoulos, Thanos, 2015. "Performance measures and metrics in outsourcing decisions: A review for research and applications," International Journal of Production Economics, Elsevier, vol. 161(C), pages 153-166.
    7. Zhang, Bin, 2012. "Multi-tier binary solution method for multi-product newsvendor problem with multiple constraints," European Journal of Operational Research, Elsevier, vol. 218(2), pages 426-434.
    8. Serel, Doğan A., 2012. "Multi-item quick response system with budget constraint," International Journal of Production Economics, Elsevier, vol. 137(2), pages 235-249.
    9. Chernonog, Tatyana & Goldberg, Noam, 2018. "On the multi-product newsvendor with bounded demand distributions," International Journal of Production Economics, Elsevier, vol. 203(C), pages 38-47.
    10. Zhang, Bin & Xu, Liang, 2013. "Multi-item production planning with carbon cap and trade mechanism," International Journal of Production Economics, Elsevier, vol. 144(1), pages 118-127.
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    12. Chiu, Singa Wang & Chen, Hui-Cun & Wu, Hua-Yao & Chiu, Yuan-Shyi Peter, 2020. "A hybrid finite production rate system featuring random breakdown and rework," Operations Research Perspectives, Elsevier, vol. 7(C).
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    18. Tjader, Youxu Cai & Shang, Jennifer S. & Vargas, Luis G., 2010. "Offshore outsourcing decision making: A policy-maker's perspective," European Journal of Operational Research, Elsevier, vol. 207(1), pages 434-444, November.
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    22. Christopher Dance & Alexei Gaivoronski, 2012. "Stochastic optimization for real time service capacity allocation under random service demand," Annals of Operations Research, Springer, vol. 193(1), pages 221-253, March.

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