Decision Models for Cross-Sell Product with Two Ordering Opportunities

Ding Ran and Chen Jie ()
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Ding Ran: Nanjing University of Science and Technology Name of Organization School of Economics and Management
Chen Jie: Nanjing University of Science and Technology Name of Organization School of Economics and Management

A chapter in LISS 2024, 2025, pp 121-136 from Springer

Abstract: Abstract This paper studies a newsvendor model for two types of products with one-way cross-selling and the retailer had two ordering opportunities. Introducing maximum replenishment. Building and solving the newsvendor model, proving that the model is a concave function by means of the Hesser matrix study; and derive the conditions for the existence of the optimal solution of the model. The numerical examples is verified validity of the model. The genetic algorithm is used to derive the optimal solution of numerical example. The sensitivity analysis of the different elements show that the model is effective. The results show that the total expected revenue of the condition of one-way cross-selling effect is superior to separate ordering with independent demand; The increase of the cross-selling coefficient, the model will order more major products and the less secondary products, and lower expected revenue; with the increase of the maximum replenishment quantity, the model will order less quantity of the main products,and the higher the expected revenue; As the profit from sales of the main products increases, the order quantity of the main products grows, leading to a higher expected return.

Keywords: Cross-selling; Two-item newsvendor model; Seasonal commodities (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnopch:978-981-96-9697-0_11

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DOI: 10.1007/978-981-96-9697-0_11

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