IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v12y2024i11p1652-d1401162.html
   My bibliography  Save this article

Fuzzy Multi-Item Newsvendor Problem: An Application to Inventory Management

Author

Listed:
  • João M. C. Sousa

    (IDMEC, Instituto Superior Técnico, Universidade de Lisboa, 1049-001 Lisboa, Portugal)

  • Rodrigo Luís

    (IDMEC, Instituto Superior Técnico, Universidade de Lisboa, 1049-001 Lisboa, Portugal)

  • Rui Mirra Santos

    (IDMEC, Instituto Superior Técnico, Universidade de Lisboa, 1049-001 Lisboa, Portugal)

  • Luís Mendonça

    (IDMEC, Escola Superior Náutica Infante D. Henrique (ENIDH), 2770-058 Paço de Arcos, Portugal)

  • Susana M. Vieira

    (IDMEC, Instituto Superior Técnico, Universidade de Lisboa, 1049-001 Lisboa, Portugal)

Abstract

This paper proposes a novel approach to the fuzzy newsvendor problem for inventory management applications. The main contributions of the paper are the following: a new credibility estimation is proposed, to explore the neighborhood around the most impactful demand scenarios; a simulation procedure was designed for the different demand scenarios, which allows comparison of the proposed approach with classical and fuzzy multi-item newsvendor problems; a modified genetic algorithm (GA) is introduced to ameliorate previous genetic algorithms in both the generation and evaluation of solutions. The new formulation of the fuzzy newsvendor problem, together with the modified GA, were shown to improve the average profit by up to 55% in problems with low-budget scenarios.

Suggested Citation

  • 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 1-18, May.
    • Handle: RePEc:gam:jmathe:v:12:y:2024:i:11:p:1652-:d:1401162
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/12/11/1652/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/12/11/1652/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gah-Yi Ban & Cynthia Rudin, 2019. "The Big Data Newsvendor: Practical Insights from Machine Learning," Operations Research, INFORMS, vol. 67(1), pages 90-108, January.
    2. Lau, Hon-Shiang & Hing-Ling Lau, Amy, 1996. "The newsstand problem: A capacitated multiple-product single-period inventory problem," European Journal of Operational Research, Elsevier, vol. 94(1), pages 29-42, October.
    3. Jianmai Shi & Yiping Bao, 2016. "Multiproduct Multiperiod Newsvendor Problem with Dynamic Market Efforts," Discrete Dynamics in Nature and Society, Hindawi, vol. 2016, pages 1-10, October.
    4. Oral, Muhittin & Kettani, Ossama, 1992. "Reformulating nonlinear combinatorial optimization problems for higher computational efficiency," European Journal of Operational Research, Elsevier, vol. 58(2), pages 236-249, April.
    5. Panos Kouvelis & Wenhui Zhao, 2018. "Who Should Finance the Supply Chain? Impact of Credit Ratings on Supply Chain Decisions," Manufacturing & Service Operations Management, INFORMS, vol. 20(1), pages 19-35, February.
    6. Maxime C. Cohen & Ruben Lobel & Georgia Perakis, 2016. "The Impact of Demand Uncertainty on Consumer Subsidies for Green Technology Adoption," Management Science, INFORMS, vol. 62(5), pages 1235-1258, May.
    7. 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.
    8. 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.
    9. Abdel-Malek, Layek L. & Montanari, Roberto, 2005. "An analysis of the multi-product newsboy problem with a budget constraint," International Journal of Production Economics, Elsevier, vol. 97(3), pages 296-307, September.
    10. Panos Kouvelis & Wenhui Zhao, 2016. "Supply Chain Contract Design Under Financial Constraints and Bankruptcy Costs," Management Science, INFORMS, vol. 62(8), pages 2341-2357, August.
    Full references (including those not matched with items on IDEAS)

    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. Xie, Xiaofeng & Shi, Xinyu & Gu, Jing & Xu, Xun, 2023. "Examining the Contagion Effect of Credit Risk in a Supply Chain under Trade Credit and Bank Loan Offering," Omega, Elsevier, vol. 115(C).
    2. Xie, Xiaofeng & Chen, Xiangfeng & Xu, Xun & Gu, Jing, 2024. "Financing a dual capital-constrained supply chain: Profit enhancement and diffusion effect of default risk," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 181(C).
    3. Yang, Yang & Liu, Jie & Hu, Taizhong, 2023. "Capital allocation and pricing decisions under trade credit with time-sensitive stochastic demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 173(C).
    4. Serrano, Breno & Minner, Stefan & Schiffer, Maximilian & Vidal, Thibaut, 2024. "Bilevel optimization for feature selection in the data-driven newsvendor problem," European Journal of Operational Research, Elsevier, vol. 315(2), pages 703-714.
    5. 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.
    6. Lu, Xiangyuan & Wu, Zhiqiao, 2020. "How taxes impact bank and trade financing for Multinational Firms," European Journal of Operational Research, Elsevier, vol. 286(1), pages 218-232.
    7. Wang, Chengfu & Chen, Xiangfeng & Xu, Xun & Jin, Wei, 2023. "Financing and operating strategies for blockchain technology-driven accounts receivable chains," European Journal of Operational Research, Elsevier, vol. 304(3), pages 1279-1295.
    8. Zelong Yi & Yulan Wang & Ying‐Ju Chen, 2021. "Financing an Agricultural Supply Chain with a Capital‐Constrained Smallholder Farmer in Developing Economies," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 2102-2121, July.
    9. Mandal, Prasenjit & Basu, Preetam & Choi, Tsan-Ming & Rath, Sambit Brata, 2024. "Platform financing vs. bank financing: Strategic choice of financing mode under seller competition," European Journal of Operational Research, Elsevier, vol. 315(1), pages 130-146.
    10. 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.
    11. 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.
    12. Zhang, Bin & Xu, Xiaoyan & Hua, Zhongsheng, 2009. "A binary solution method for the multi-product newsboy problem with budget constraint," International Journal of Production Economics, Elsevier, vol. 117(1), pages 136-141, January.
    13. 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.
    14. 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.
    15. Faranak Emtehani & Nasim Nahavandi & Farimah Mokhatab Rafiei, 2021. "A joint inventory–finance model for coordinating a capital-constrained supply chain with financing limitations," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-39, December.
    16. Layek Abdel-Malek & Pinyuan Shan & Roberto Montanari, 2020. "A Constructive Methodology to Solving the Capacitated Newsvendor Problem: an Approximate Approach," SN Operations Research Forum, Springer, vol. 1(2), pages 1-16, June.
    17. Liu, Congzheng & Letchford, Adam N. & Svetunkov, Ivan, 2022. "Newsvendor problems: An integrated method for estimation and optimisation," European Journal of Operational Research, Elsevier, vol. 300(2), pages 590-601.
    18. Li, Yanhai & Gu, Chaocheng & Ou, Jinwen, 2020. "Supporting a financially constrained supplier under spectral risk measures: The efficiency of buyer lending," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    19. Panos Kouvelis & Fasheng Xu, 2021. "A Supply Chain Theory of Factoring and Reverse Factoring," Management Science, INFORMS, vol. 67(10), pages 6071-6088, October.
    20. Zhang, Guoqing, 2010. "The multi-product newsboy problem with supplier quantity discounts and a budget constraint," European Journal of Operational Research, Elsevier, vol. 206(2), pages 350-360, October.

    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:gam:jmathe:v:12:y:2024:i:11:p:1652-:d:1401162. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.