Joint advertising and ordering strategies for perishable product

This paper investigates the newsvendor model with advertise-setting. The retailer faces stochastic advertisement sensitive demands, she has to make the advertising and inventory decisions before the demand is realized. First, we establish the regular condition for the model and a sufficient condition under which the optimal advertising decision is no more than its risk-less counterpart. Next, we show how the optimal decisions change about the system parameters. Finally, we present an example to illustrate our findings. Our analysis generalizes the many known results in the literatures.