The single-period inventory problem: Extension to random yield from the perspective of the supply chain

Baruch Keren

Omega, 2009, vol. 37, issue 4, 801-810

Abstract: A special form of the single-period inventory problem (newsvendor problem) with a known demand and stochastic supply (yield) is studied. A general analytic solution for two types of yield risks, additive and multiplicative, is described. Numerical examples demonstrate the solutions for special cases of uniform distribution yield risks. An analysis of a two-tier supply chain of customer and producer reveals that the customer may find it optimal to order more than is needed, since a larger order increases the producer's optimal production quantity.

Keywords: Newsvendor; problem; Stochastic; yield; Supply; chain; management; Inventory; control (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (39)

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