IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v129y2011i1p169-177.html
   My bibliography  Save this article

Analysis of the newsboy problem with fuzzy demands and incremental discounts

Author

Listed:
  • Chen, Shih-Pin
  • Ho, Yann-Horng

Abstract

This paper proposes an analysis method for the single-period (newsboy) inventory problem with fuzzy demands and incremental quantity discounts. In fuzzy environments, the availability of the quantity discount makes the analysis of the associated model more complex. The proposed analysis method is based on ranking fuzzy number and optimization theory. By applying the Yager ranking method, the fuzzy total cost functions with different unit purchasing costs are transformed into convex piecewise nonlinear functions. To effectively and efficiently find the optimal inventory policy, the proofs of two properties regarding the relative position between the price break and minimums of these nonlinear functions are proposed. The closed-form solutions to the optimal order quantities are also derived. Four cases of a numerical example are solved to demonstrate the validity of the proposed analysis method. It is clear that the proposed methodology is applicable to further cases with different types of quantity discounts and other more complicated cases. More importantly, managerial implications are also provided for decision-makers' references.

Suggested Citation

  • Chen, Shih-Pin & Ho, Yann-Horng, 2011. "Analysis of the newsboy problem with fuzzy demands and incremental discounts," International Journal of Production Economics, Elsevier, vol. 129(1), pages 169-177, January.
    • Handle: RePEc:eee:proeco:v:129:y:2011:i:1:p:169-177
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925-5273(10)00352-X
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Amid, Amin & Ghodsypour, S.H. & O'Brien, Christopher, 2009. "A weighted additive fuzzy multiobjective model for the supplier selection problem under price breaks in a supply Chain," International Journal of Production Economics, Elsevier, vol. 121(2), pages 323-332, October.
    2. Ishii, Hiroaki & Konno, Tutomu, 1998. "A stochastic inventory problem with fuzzy shortage cost," European Journal of Operational Research, Elsevier, vol. 106(1), pages 90-94, April.
    3. Mula, J. & Poler, R. & Garcia-Sabater, J.P. & Lario, F.C., 2006. "Models for production planning under uncertainty: A review," International Journal of Production Economics, Elsevier, vol. 103(1), pages 271-285, September.
    4. Monica Lam, S. & Wong, Danny S., 1996. "A fuzzy mathematical model for the joint economic lot size problem with multiple price breaks," European Journal of Operational Research, Elsevier, vol. 95(3), pages 611-622, December.
    5. Arshinder & Kanda, Arun & Deshmukh, S.G., 2008. "Supply chain coordination: Perspectives, empirical studies and research directions," International Journal of Production Economics, Elsevier, vol. 115(2), pages 316-335, October.
    6. Özler, Aysun & Tan, BarIs & Karaesmen, Fikri, 2009. "Multi-product newsvendor problem with value-at-risk considerations," International Journal of Production Economics, Elsevier, vol. 117(2), pages 244-255, February.
    7. Chang, San-Chyi & Yao, Jing-Shing & Lee, Huey-Ming, 1998. "Economic reorder point for fuzzy backorder quantity," European Journal of Operational Research, Elsevier, vol. 109(1), pages 183-202, August.
    8. Shi, Jianmai & Zhang, Guoqing, 2010. "Multi-product budget-constrained acquisition and pricing with uncertain demand and supplier quantity discounts," International Journal of Production Economics, Elsevier, vol. 128(1), pages 322-331, November.
    9. Lee, Huey-Ming & Yao, Jing-Shing, 1998. "Economic production quantity for fuzzy demand quantity, and fuzzy production quantity," European Journal of Operational Research, Elsevier, vol. 109(1), pages 203-211, August.
    10. Mostard, Julien & de Koster, Rene & Teunter, Ruud, 2005. "The distribution-free newsboy problem with resalable returns," International Journal of Production Economics, Elsevier, vol. 97(3), pages 329-342, September.
    11. Roy, T.K. & Maiti, M., 1997. "A fuzzy EOQ model with demand-dependent unit cost under limited storage capacity," European Journal of Operational Research, Elsevier, vol. 99(2), pages 425-432, June.
    12. Serel, Dogan A., 2008. "Inventory and pricing decisions in a single-period problem involving risky supply," International Journal of Production Economics, Elsevier, vol. 116(1), pages 115-128, November.
    13. Petrovic, Dobrila & Petrovic, Radivoj & Vujosevic, Mirko, 1996. "Fuzzy models for the newsboy problem," International Journal of Production Economics, Elsevier, vol. 45(1-3), pages 435-441, August.
    14. Giannoccaro, Ilaria & Pontrandolfo, Pierpaolo & Scozzi, Barbara, 2003. "A fuzzy echelon approach for inventory management in supply chains," European Journal of Operational Research, Elsevier, vol. 149(1), pages 185-196, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guo, Peijun & Ma, Xiuyan, 2014. "Newsvendor models for innovative products with one-shot decision theory," European Journal of Operational Research, Elsevier, vol. 239(2), pages 523-536.
    2. Su, Rung Hung & Pearn, Wen Lea, 2011. "Product selection for newsboy-type products with normal demands and unequal costs," International Journal of Production Economics, Elsevier, vol. 132(2), pages 214-222, August.
    3. Afshar-Nadjafi, Behrouz, 2016. "The influence of sale announcement on the optimal policy of an inventory system with perishable items," Journal of Retailing and Consumer Services, Elsevier, vol. 31(C), pages 239-245.
    4. Marziyeh Karimi & Amir Hossein Niknamfar & Seyed Hamid Reza Pasandideh, 2017. "Two-stage single period inventory management for a manufacturing vendor under green-supplier supply chain," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 8(4), pages 704-718, December.
    5. Guo, Min & Chen, Yu-wang & Wang, Hongwei & Yang, Jian-Bo & Zhang, Keyong, 2019. "The single-period (newsvendor) problem under interval grade uncertainties," European Journal of Operational Research, Elsevier, vol. 273(1), pages 198-216.
    6. He, Zhou & Wang, Shouyang & Cheng, T.C.E., 2013. "Competition and evolution in multi-product supply chains: An agent-based retailer model," International Journal of Production Economics, Elsevier, vol. 146(1), pages 325-336.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chang, Hung-Chi & Yao, Jing-Shing & Ouyang, Liang-Yuh, 2006. "Fuzzy mixture inventory model involving fuzzy random variable lead time demand and fuzzy total demand," European Journal of Operational Research, Elsevier, vol. 169(1), pages 65-80, February.
    2. Wu, Kweimei & Yao, Jing-Shing, 2003. "Fuzzy inventory with backorder for fuzzy order quantity and fuzzy shortage quantity," European Journal of Operational Research, Elsevier, vol. 150(2), pages 320-352, October.
    3. Wu, Meng & Zhu, Stuart X. & Teunter, Ruud H., 2013. "Newsvendor problem with random shortage cost under a risk criterion," International Journal of Production Economics, Elsevier, vol. 145(2), pages 790-798.
    4. Yao, Jing-Shing & Chiang, Jershan, 2003. "Inventory without backorder with fuzzy total cost and fuzzy storing cost defuzzified by centroid and signed distance," European Journal of Operational Research, Elsevier, vol. 148(2), pages 401-409, July.
    5. Henry Inegbedion* & Sunday Eze & Abiola Asaleye & Adedoyin Lawal, 2019. "Inventory Management and Organisational Efficiency," The Journal of Social Sciences Research, Academic Research Publishing Group, vol. 5(3), pages 756-763, 03-2019.
    6. Xie, Ying & Petrovic, Dobrila & Burnham, Keith, 2006. "A heuristic procedure for the two-level control of serial supply chains under fuzzy customer demand," International Journal of Production Economics, Elsevier, vol. 102(1), pages 37-50, July.
    7. Arpita Roy & Shib Sankar Sana & Kripasindhu Chaudhuri, 2018. "Optimal Pricing of competing retailers under uncertain demand-a two layer supply chain model," Annals of Operations Research, Springer, vol. 260(1), pages 481-500, January.
    8. João M. C. Sousa & Rodrigo Luís & Rui Mirra Santos & Luís Mendonça & Susana M. Vieira, 2024. "Fuzzy Multi-Item Newsvendor Problem: An Application to Inventory Management," Mathematics, MDPI, vol. 12(11), pages 1-17, May.
    9. Chang, Ping-Teng & Yao, Ming-Jong & Huang, Shih-Fen & Chen, Chia-Tsung, 2006. "A genetic algorithm for solving a fuzzy economic lot-size scheduling problem," International Journal of Production Economics, Elsevier, vol. 102(2), pages 265-288, August.
    10. Rong, M. & Mahapatra, N.K. & Maiti, M., 2008. "A two warehouse inventory model for a deteriorating item with partially/fully backlogged shortage and fuzzy lead time," European Journal of Operational Research, Elsevier, vol. 189(1), pages 59-75, August.
    11. Ryu, Kwangyeol & Yücesan, Enver, 2010. "A fuzzy newsvendor approach to supply chain coordination," European Journal of Operational Research, Elsevier, vol. 200(2), pages 421-438, January.
    12. Ashoke Kumar Bera & Dipak Kumar Jana, 2017. "Multi-item imperfect production inventory model in Bi-fuzzy environments," OPSEARCH, Springer;Operational Research Society of India, vol. 54(2), pages 260-282, June.
    13. Ouyang, Liang-Yuh & Chang, Hung-Chi, 2002. "A minimax distribution free procedure for mixed inventory models involving variable lead time with fuzzy lost sales," International Journal of Production Economics, Elsevier, vol. 76(1), pages 1-12, March.
    14. Guo, Peijun & Ma, Xiuyan, 2014. "Newsvendor models for innovative products with one-shot decision theory," European Journal of Operational Research, Elsevier, vol. 239(2), pages 523-536.
    15. YazgI Tütüncü, G. & Aköz, Onur & ApaydIn, Aysen & Petrovic, Dobrila, 2008. "Continuous review inventory control in the presence of fuzzy costs," International Journal of Production Economics, Elsevier, vol. 113(2), pages 775-784, June.
    16. Guo, Min & Chen, Yu-wang & Wang, Hongwei & Yang, Jian-Bo & Zhang, Keyong, 2019. "The single-period (newsvendor) problem under interval grade uncertainties," European Journal of Operational Research, Elsevier, vol. 273(1), pages 198-216.
    17. Yao, Jing-Shing & Su, Jin-Shieh, 2000. "Fuzzy inventory with backorder for fuzzy total demand based on interval-valued fuzzy set," European Journal of Operational Research, Elsevier, vol. 124(2), pages 390-408, July.
    18. Sayın, F. & Karaesmen, F. & Özekici, S., 2014. "Newsvendor model with random supply and financial hedging: Utility-based approach," International Journal of Production Economics, Elsevier, vol. 154(C), pages 178-189.
    19. Kristianto, Yohanes & Helo, Petri & Jiao, Jianxin (Roger) & Sandhu, Maqsood, 2012. "Adaptive fuzzy vendor managed inventory control for mitigating the Bullwhip effect in supply chains," European Journal of Operational Research, Elsevier, vol. 216(2), pages 346-355.
    20. Chen, Jing, 2011. "Returns with wholesale-price-discount contract in a newsvendor problem," International Journal of Production Economics, Elsevier, vol. 130(1), pages 104-111, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:129:y:2011:i:1:p:169-177. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.