Flexile ordering policy of two-stage newsvendor model with demand updating under demand uncertainty

Rui Wang, Shiji Song, Yuli Zhang, Cheng Wu

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

1 Citation (Scopus)

Abstract

This paper studies the retailer's flexible ordering policy for a two-stage newsvendor model with demand information updating. Demand uncertainty and the limited order quantity are considered at the same time. The optimal order quantities of the first and second-stage are obtained by analyzing the characteristics of the two stage newsvendor model, and an optimal order policy is proposed in the second-stage. Furthermore, we discuss the optimal order quantities of the first and second-stage in the cases of perfect and worthless information. We also compare the limited and unlimited reducing order in the cases of the optimal first-stage and total order quantities. Numerical examples are given to describe the relationships of the total optimal order quantity, market signal, the information accuracy and flexible level.

Original languageEnglish
Title of host publicationProceedings of the 35th Chinese Control Conference, CCC 2016
EditorsJie Chen, Qianchuan Zhao, Jie Chen
PublisherIEEE Computer Society
Pages2697-2702
Number of pages6
ISBN (Electronic)9789881563910
DOIs
Publication statusPublished - 26 Aug 2016
Externally publishedYes
Event35th Chinese Control Conference, CCC 2016 - Chengdu, China
Duration: 27 Jul 201629 Jul 2016

Publication series

NameChinese Control Conference, CCC
Volume2016-August
ISSN (Print)1934-1768
ISSN (Electronic)2161-2927

Conference

Conference35th Chinese Control Conference, CCC 2016
Country/TerritoryChina
CityChengdu
Period27/07/1629/07/16

Keywords

  • Demand uncertainty
  • Flexible ordering policy
  • Information updating

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