The single-period inventory problem: Extension to random yield from the perspective of the supply chain
AbstractA special form of the single-period inventory problem (newsvendor problem) with a known demand and stochastic supply (yield) is studied. A general analytic solution for two types of yield risks, additive and multiplicative, is described. Numerical examples demonstrate the solutions for special cases of uniform distribution yield risks. An analysis of a two-tier supply chain of customer and producer reveals that the customer may find it optimal to order more than is needed, since a larger order increases the producer's optimal production quantity.
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Bibliographic InfoArticle provided by Elsevier in its journal Omega.
Volume (Year): 37 (2009)
Issue (Month): 4 (August)
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