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Blockchain-empowered Newsvendor optimization

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  • Chang, Jasmine (Aichih)
  • Katehakis, Michael N.
  • Shi, Jim (Junmin)
  • Yan, Zhipeng

Abstract

Technology has been widely adopted as a backbone for supply chain management, especially in the context of retailing. For example, Blockchain Technology (BCT) has been embraced as a disruptive technology, though it is still in a nascent stage. This study examines the technology adoption for Newsvendor model (a.k.a Newsboy), as exemplified by a blockchain system. It aims to shed light on how BCT adoption impacts the optimal ordering decisions and the corresponding optimal profit. Importantly, we investigate the optimal adoption of technology for profit optimization while considering the adoption cost. As a result, we visualize how technology adoption shifts the curve. For some selected demand types (e.g., Uniform and Normal distributions) and the Cobb-Douglas cost function, we derive closed-form expressions for the optimal decisions, based on which some useful insights have been developed. Although high adoption of BCT leads to higher demand and lower ordering cost, some counter-intuitive examples have been devised to reveal that the increase in adoption degree might lower the optimal order quantity and it is not always profitable to adopt a higher BCT even if there is no adoption cost. Finally, a sequence of numerical studies complements our analytical results with rich and useful insights.

Suggested Citation

  • Chang, Jasmine (Aichih) & Katehakis, Michael N. & Shi, Jim (Junmin) & Yan, Zhipeng, 2021. "Blockchain-empowered Newsvendor optimization," International Journal of Production Economics, Elsevier, vol. 238(C).
    • Handle: RePEc:eee:proeco:v:238:y:2021:i:c:s0925527321001201
    DOI: 10.1016/j.ijpe.2021.108144
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    References listed on IDEAS

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    4. Ahmed Antwi-Boampong & David King Boison & Musah Osumanu Doumbia & Afia Nyarko Boakye & Linda Osei-Fosua & Kwame Owiredu Sarbeng, 2022. "Factors Affecting Port Users’ Behavioral Intentions to Adopt Financial Technology (Fintech) in Ports in Sub-Saharan Africa: A Case of Ports in Ghana," FinTech, MDPI, vol. 1(4), pages 1-14, November.
    5. Ji, Guojun & Zhou, Shu & Lai, Kee-Hung & Tan, Kim Hua & Kumar, Ajay, 2022. "Timing of blockchain adoption in a supply chain with competing manufacturers," International Journal of Production Economics, Elsevier, vol. 247(C).
    6. Datta, Alotosh & Sarkar, Biswajit & Dey, Bikash Koli & Sangal, Isha & Yang, Liu & Fan, Shu-Kai S. & Sardar, Suman Kalyan & Thangavelu, Lakshmi, 2024. "The impact of sales effort on a dual-channel dynamical system under a price-sensitive stochastic demand," Journal of Retailing and Consumer Services, Elsevier, vol. 76(C).
    7. Jian-Jun Wang & Zongli Dai & Ai-Chih Chang & Jim Junmin Shi, 2022. "Surgical scheduling by Fuzzy model considering inpatient beds shortage under uncertain surgery durations," Annals of Operations Research, Springer, vol. 315(1), pages 463-505, August.
    8. Zhitao Xu & Adel Elomri & Roberto Baldacci & Laoucine Kerbache & Zhenyong Wu, 2024. "Frontiers and trends of supply chain optimization in the age of industry 4.0: an operations research perspective," Annals of Operations Research, Springer, vol. 338(2), pages 1359-1401, July.
    9. Chen, Ting & Xiong, Yu, 2024. "Product positioning of low-carbon products based on blockchain-enabled product communities," Technovation, Elsevier, vol. 132(C).
    10. Jian-Jun Wang & Zongli Dai & Wenxuan Zhang & Jim Junmin Shi, 2023. "Operating room scheduling for non-operating room anesthesia with emergency uncertainty," Annals of Operations Research, Springer, vol. 321(1), pages 565-588, February.
    11. Aichih (Jasmine) Chang & Nesreen El-Rayes & Jim Shi, 2022. "Blockchain Technology for Supply Chain Management: A Comprehensive Review," FinTech, MDPI, vol. 1(2), pages 1-15, June.
    12. Po-Han Ko & Yu-Ling Hsueh & Chih-Wen Hsueh, 2022. "A Low-Storage Blockchain Framework Based on Incentive Pricing Strategies," FinTech, MDPI, vol. 1(3), pages 1-26, September.
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