The Study Of Newsboy Problem About Optimal Ordering Under Two Situations

Newsboy problem is always the hot topic in inventory management. The classical newsboy problem is to find a product order quantity that maximizing expected total profit or minimizing expected total expense in a single cycle while the demand is random. This article expands the Newsboy problem in two situatiations as follows:In the second chapter, firstly we establish a classical Newsboy cost model, and obtain the optimal order quantity that minimizing the total cost. Secondly, the two-ordering total expense models are established according to the classical Newsboy model by considering that the demand distributions have general distribution forms. The existence and the uniqueness of optimal ordering policies are proved under the assumption that the first-period and the second-period demands are independent. Numerical examples illustrate the solution procedure. And some managerial insights are obtained as well through the comparison of two ordering policies.As the inventory control of alternative products has become a hot research in supply chain inventory management, the third chapter of this article considers the economic order quantity problem with three substituting commodities, in which shortage of one commodity may be replenished by another item with the fixed substituting rate in planned horizon. Firstly, we establish a model in which three kinds of commodities can be mutually replaced; Secondly, according to the actual inventory condition, we divide the sample space of random variables into eight cases, then derive the profit of each case, and abtain the total profit; Finally, the numerical examples and sensitivity analyses are provided.