Quadratic Approximation of the Newsvendor Problem with Imperfect Quality

Natapat Areerakulkan ()
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Natapat Areerakulkan: Department of Engineering Management, College of Innovative Technology and Engineering, Dhurakij Pundit University, Bangkok, Thailand

Journal of Reviews on Global Economics, 2017, vol. 6, 335-341

Abstract: The paper presents a newsvendor problem in a fuzzy environment by introducing product quality as a fuzzy variable, and product demand as a probability distribution in an economic and supply chain management environment. In order to determine the optimal order quantity, a methodology is developed where the solution is achieved using a fuzzy ranking method combined with a quadratic programming problem approximation. Numerical examples are provided and compared in both situations, namely fuzzy and crisp. The results of these numerical examples show that the decision maker has to order a higher quantity when product quality is a fuzzy variable. The model can be useful for real world problems when historical data are not available.

Keywords: Imperfect quality items; Newsvendor problem; Quadratic programming. (search for similar items in EconPapers)
JEL-codes: C61 C63 L15 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:lif:jrgelg:v:6:y:2017:p:335-341

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