A Newsvendor Model with Initial Inventory and Two Salvage Opportunities

Christian van Delft (), Ali Cheaitoua, Zied Jemai () and Yves Dallery ()
Additional contact information
Christian van Delft: GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique
Ali Cheaitoua: LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec
Zied Jemai: LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec
Yves Dallery: LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec

Post-Print from HAL

Abstract: In this paper, we develop an extension of the newsvendor model with initial inventory. In addition to the usual quantity ordered at the beginning of the horizon and the usual quantity salvaged at the end of the horizon, we introduce a new decision variable: a salvage opportunity at the beginning of the horizon, which might be used in the case of high initial inventory level. We develop the expression of the optimal policy for this extended model, for a general demand distribution. The structure of this optimal policy is particular and is characterized by two threshold levels. Some managerial insights are given via numerical examples.

Keywords: Newsvendor model; initial inventory; lost sales; salvage opportunities; concave optimisation; threshold levels (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published in Journal of Systemics, Cybernetics and Informatics, 2011, 9 (3), pp.30-36

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00588707

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().