IDEAS home Printed from https://ideas.repec.org/a/eee/jomega/v37y2009i4p801-810.html
   My bibliography  Save this article

The single-period inventory problem: Extension to random yield from the perspective of the supply chain

Author

Listed:
  • Keren, Baruch

Abstract

A 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.

Suggested Citation

  • Keren, Baruch, 2009. "The single-period inventory problem: Extension to random yield from the perspective of the supply chain," Omega, Elsevier, vol. 37(4), pages 801-810, August.
    • Handle: RePEc:eee:jomega:v:37:y:2009:i:4:p:801-810
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305-0483(08)00088-1
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Khouja, Moutaz, 1999. "The single-period (news-vendor) problem: literature review and suggestions for future research," Omega, Elsevier, vol. 27(5), pages 537-553, October.
    2. Weng, Z. Kevin, 2004. "Coordinating order quantities between the manufacturer and the buyer: A generalized newsvendor model," European Journal of Operational Research, Elsevier, vol. 156(1), pages 148-161, July.
    3. Gurnani, Haresh & Gerchak, Yigal, 2007. "Coordination in decentralized assembly systems with uncertain component yields," European Journal of Operational Research, Elsevier, vol. 176(3), pages 1559-1576, February.
    4. Parlar, Mahmut & Wang, Dan, 1993. "Diversification under yield randomness in inventory models," European Journal of Operational Research, Elsevier, vol. 66(1), pages 52-64, April.
    5. Rau, Hsin & Wu, Mei-Ying & Wee, Hui-Ming, 2003. "Integrated inventory model for deteriorating items under a multi-echelon supply chain environment," International Journal of Production Economics, Elsevier, vol. 86(2), pages 155-168, November.
    6. Keren, Baruch & Pliskin, Joseph S., 2006. "A benchmark solution for the risk-averse newsvendor problem," European Journal of Operational Research, Elsevier, vol. 174(3), pages 1643-1650, November.
    7. Ding, Ding & Chen, Jian, 2008. "Coordinating a three level supply chain with flexible return policies," Omega, Elsevier, vol. 36(5), pages 865-876, October.
    8. Candace Arai Yano & Hau L. Lee, 1995. "Lot Sizing with Random Yields: A Review," Operations Research, INFORMS, vol. 43(2), pages 311-334, April.
    9. Hau L. Lee & V. Padmanabhan & Seungjin Whang, 1997. "Information Distortion in a Supply Chain: The Bullwhip Effect," Management Science, INFORMS, vol. 43(4), pages 546-558, April.
    10. repec:hal:journl:hal-02312466 is not listed on IDEAS
    11. Choi, Tsan-Ming & Li, Duan & Yan, Houmin & Chiu, Chun-Hung, 2008. "Channel coordination in supply chains with agents having mean-variance objectives," Omega, Elsevier, vol. 36(4), pages 565-576, August.
    12. Mordechai Henig & Yigal Gerchak, 1990. "The Structure of Periodic Review Policies in the Presence of Random Yield," Operations Research, INFORMS, vol. 38(4), pages 634-643, August.
    13. Tony Haitao Cui & Jagmohan S. Raju & Z. John Zhang, 2007. "Fairness and Channel Coordination," Management Science, INFORMS, vol. 53(8), pages 1303-1314, August.
    14. Arcelus, F.J. & Kumar, Satyendra & Srinivasan, G., 2008. "Evaluating manufacturer's buyback policies in a single-period two-echelon framework under price-dependent stochastic demand," Omega, Elsevier, vol. 36(5), pages 808-824, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kartikeya Puranam & David C. Novak & Marilyn Lucas, 2022. "Extending the newsvendor model to account for uncontrolled inventory transfers," Annals of Operations Research, Springer, vol. 317(1), pages 213-226, October.
    2. Huang, Di & Zhou, Hong & Zhao, Qiu-Hong, 2011. "A competitive multiple-product newsboy problem with partial product substitution," Omega, Elsevier, vol. 39(3), pages 302-312, June.
    3. Kyungchul Park & Kyungsik Lee, 2016. "Distribution-robust single-period inventory control problem with multiple unreliable suppliers," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 38(4), pages 949-966, October.
    4. He, Yuanjie & Zhang, Jiang, 2010. "Random yield supply chain with a yield dependent secondary market," European Journal of Operational Research, Elsevier, vol. 206(1), pages 221-230, October.
    5. Yan, Xiaoming & Zhang, Minghui & Liu, Ke, 2010. "A note on coordination in decentralized assembly systems with uncertain component yields," European Journal of Operational Research, Elsevier, vol. 205(2), pages 469-478, September.
    6. Hsieh, Chung-Chi & Lai, Hsing-Hua, 2017. "Capacity allocation with differentiated product demands under dual sourcing," International Journal of Production Economics, Elsevier, vol. 193(C), pages 757-769.
    7. Saurabh Bansal & Mahesh Nagarajan, 2017. "Product Portfolio Management with Production Flexibility in Agribusiness," Operations Research, INFORMS, vol. 65(4), pages 914-930, August.
    8. Xiang Li & Yongjian Li, 2016. "On lot-sizing problem in a random yield production system under loss aversion," Annals of Operations Research, Springer, vol. 240(2), pages 415-434, May.
    9. Gel, Esma S. & Salman, F. Sibel, 2022. "Dynamic ordering decisions with approximate learning of supply yield uncertainty," International Journal of Production Economics, Elsevier, vol. 243(C).
    10. Arcelus, F.J. & Kumar, Satyendra & Srinivasan, G., 2012. "Risk tolerance and a retailer's pricing and ordering policies within a newsvendor framework," Omega, Elsevier, vol. 40(2), pages 188-198, April.
    11. Shaofu Du & Yujiao Zhu & Tengfei Nie & Haisuo Yu, 2018. "Loss-averse preferences in a two-echelon supply chain with yield risk and demand uncertainty," Operational Research, Springer, vol. 18(2), pages 361-388, July.
    12. Jörnsten, Kurt & Lise Nonås, Sigrid & Sandal, Leif & Ubøe, Jan, 2012. "Transfer of risk in the newsvendor model with discrete demand," Omega, Elsevier, vol. 40(3), pages 404-414.
    13. Asli Sencer Erdem & Mehmet Murat Fadilog̃lu & Süleyman Özekici, 2006. "An EOQ model with multiple suppliers and random capacity," Naval Research Logistics (NRL), John Wiley & Sons, vol. 53(1), pages 101-114, February.
    14. Seung Hwan Jung, 2020. "Offshore versus Onshore Sourcing: Quick Response, Random Yield, and Competition," Production and Operations Management, Production and Operations Management Society, vol. 29(3), pages 750-766, March.
    15. Awi Federgruen & Nan Yang, 2008. "Selecting a Portfolio of Suppliers Under Demand and Supply Risks," Operations Research, INFORMS, vol. 56(4), pages 916-936, August.
    16. Divya Tiwari & Rahul Patil & Janat Shah, 2015. "Sequential unreliable newsboy ordering policies," Annals of Operations Research, Springer, vol. 233(1), pages 449-463, October.
    17. Xu, He, 2010. "Managing production and procurement through option contracts in supply chains with random yield," International Journal of Production Economics, Elsevier, vol. 126(2), pages 306-313, August.
    18. Kimitoshi Sato & Kyoko Yagi & Masahito Shimazaki, 2018. "A Stochastic Inventory Model for a Random Yield Supply Chain with Wholesale-Price and Shortage Penalty Contracts," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 35(06), pages 1-30, December.
    19. Xue, Weili & Choi, Tsan-Ming & Ma, Lijun, 2016. "Diversification strategy with random yield suppliers for a mean–variance risk-sensitive manufacturer," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 90(C), pages 90-107.
    20. Karl Inderfurth, 2015. "Safety Stocks in Centralized and Decentralized Supply Chains under Different Types of Random Yields," FEMM Working Papers 150007, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jomega:v:37:y:2009:i:4:p:801-810. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.