Title :
The multi-product newsboy problem with service level constraint
Author :
Jiangtao, Mo ; Ting, Fan ; Guimei, Chen ; Hong, Mao
Author_Institution :
Coll. of Math. & Inf. Sci., Guangxi Univ., Nanning, China
Abstract :
Service level plays an essential role in inventory management due to the fierce competition. In this paper, a multi-product newsboy problem model with service level constraint is developed. The aim is to maximize the expected profit of the inventory system which satisfy a given total service level. The existence and uniqueness of the optimal solution are discussed and, using bisection approach, the method for finding optimal strategy is proposed. Numerical examples show the effectiveness of the model and the algorithm. Sensitivity analysis is provided for reflecting the relationship between service level and expected profit, which leads to managerial insights about inventory management.
Keywords :
inventory management; profitability; bisection approach; inventory management; multiproduct newsboy problem; profit maximization; sensitivity analysis; service level constraint; Analytical models; Industrial economics; Inventory management; Numerical models; Optimization; Search methods; Sensitivity analysis; KKT condition; bisection approach; multi-product newsboy problem (MPNP); service level;
Conference_Titel :
Business Management and Electronic Information (BMEI), 2011 International Conference on
Conference_Location :
Guangzhou
Print_ISBN :
978-1-61284-108-3
DOI :
10.1109/ICBMEI.2011.5917971
