Multi-step newsvendors revisited: targeted marketing investment and informativeness

Elia Balugani, Antonio Coruzzolo, Francesco Lolli, Yacine Rekik () and Aris Syntetos
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Elia Balugani: University of Modena and Reggio Emilia (Italy, Modena)
Antonio Coruzzolo: University of Modena and Reggio Emilia (Italy, Modena)
Francesco Lolli: University of Modena and Reggio Emilia (Italy, Modena)
Yacine Rekik: EM - EMLyon Business School
Aris Syntetos: Cardiff University

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Abstract: We study a retailer of short-life products facing a season with two ordering opportunities. A planned targeted marketing campaign executed immediately before the second opportunity can reduce second-period demand variance. The retailer must decide whether to invest and how much to order in each period. We formulate the problem as a two–period newsvendor and solve it with dynamic programming. A scenario analysis shows that targeted variance reduction is effective unless the first order is substantially oversized or the campaign is very costly. We also provide a benchmark comparison (no–marketing), quantify miscommunication risks, and examine how the relative lengths of the two periods affect performance.

Keywords: forecasting; newsvendor; dynamic programming; inventory (search for similar items in EconPapers)
Date: 2026-06-22
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Published in International Journal of Production Research, In press, pp.24. ⟨10.1080/00207543.2026.2683882⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05672267

DOI: 10.1080/00207543.2026.2683882

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