IDEAS home Printed from https://ideas.repec.org/a/ids/eujine/v7y2013i1p2-15.html
   My bibliography  Save this article

Profitability evaluation for newsboy-type product with normally distributed demand

Author

Listed:
  • R.H. Su
  • W.L. Pearn

Abstract

This paper considered newsboy-type products with a normally distributed demand, and defined a product's profitability as the probability of achieving the target profit under optimal ordering condition. In order to determine whether the product is already unworthy of being ordered (or manufactured) in a competitive market, we conducted a profitability evaluation which examines whether the profitability meets a designated requirement. As the parameters µ and σ are unknown, we introduced a new index (achievable capacity index; IA) which has a simple form expression of the product's profitability, and found an unbiased and effective estimator of IA to estimate the actual IA. In addition, we utilised a statistical hypothesis testing methodology. The critical value of the test was calculated to determine the evaluation results. The sample size required for the designated power and confidence level was also investigated. An application example for a fresh food product was provided to illustrate the utilisation of the proposed approach. [Received 24 July 2010; Revised 13 February 2011; Accepted 02 May 2011]

Suggested Citation

  • R.H. Su & W.L. Pearn, 2013. "Profitability evaluation for newsboy-type product with normally distributed demand," European Journal of Industrial Engineering, Inderscience Enterprises Ltd, vol. 7(1), pages 2-15.
    • Handle: RePEc:ids:eujine:v:7:y:2013:i:1:p:2-15
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=51599
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

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

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rung-Hung Su & Dong-Yuh Yang & He-Jhen Lin & Yu-Cheng Yang, 2023. "Estimating conservative profitability of a newsboy-type product with exponentially distributed demand based on multiple samples," Annals of Operations Research, Springer, vol. 322(2), pages 967-989, March.

    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:ids:eujine:v:7:y:2013:i:1:p:2-15. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=210 .

    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.