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The price-setting newsvendor problem with nonnegative linear additive demand

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  • Kyparisis, George J.
  • Koulamas, Christos

Abstract

We analyze the price-sensitive newsvendor problem with non-negative linear additive demand. We show that the problem always has an optimal solution and identify random demand distributions for which a unique optimal solution can be computed by showing that, for those distributions, the expected profit is a quasiconcave function of the retail price.

Suggested Citation

  • Kyparisis, George J. & Koulamas, Christos, 2018. "The price-setting newsvendor problem with nonnegative linear additive demand," European Journal of Operational Research, Elsevier, vol. 269(2), pages 695-698.
    • Handle: RePEc:eee:ejores:v:269:y:2018:i:2:p:695-698
    DOI: 10.1016/j.ejor.2018.02.019
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    References listed on IDEAS

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    1. Xu, Minghui & Chen, Youhua (Frank) & Xu, Xiaolin, 2010. "The effect of demand uncertainty in a price-setting newsvendor model," European Journal of Operational Research, Elsevier, vol. 207(2), pages 946-957, December.
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    5. T. M. Whitin, 1955. "Inventory Control and Price Theory," Management Science, INFORMS, vol. 2(1), pages 61-68, October.
    6. Ayşe Kocabıyıkoğlu & Ioana Popescu, 2011. "An Elasticity Approach to the Newsvendor with Price-Sensitive Demand," Operations Research, INFORMS, vol. 59(2), pages 301-312, April.
    7. Xuan Zhao & Derek R. Atkins, 2008. "Newsvendors Under Simultaneous Price and Inventory Competition," Manufacturing & Service Operations Management, INFORMS, vol. 10(3), pages 539-546, September.
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    Cited by:

    1. Kyparisis, George J. & Koulamas, Christos, 2018. "Optimal pricing and seat allocation for a two-cabin airline revenue management problem," International Journal of Production Economics, Elsevier, vol. 201(C), pages 18-25.
    2. Soham Ghosh & Sujay Mukhoti, 2023. "Non-parametric generalised newsvendor model," Annals of Operations Research, Springer, vol. 321(1), pages 241-266, February.
    3. Li, Yanhai & Ou, Jinwen, 2022. "Replenishment decisions for complementary components with supply capacity uncertainty under the CVaR criterion," European Journal of Operational Research, Elsevier, vol. 297(3), pages 904-916.
    4. Pu, Xujin & Zhang, Shiming & Ji, Bowen & Han, Guanghua, 2021. "Online channel strategies under different offline channel power structures," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    5. Bieniek, Milena, 2021. "The ubiquitous nature of inventory: Vendor Managed Consignment Inventory in adverse market conditions," European Journal of Operational Research, Elsevier, vol. 291(2), pages 411-420.
    6. Lingli Shu & Xuedong Liang & Jingyuan Yao & Peng Luo, 2023. "Price Optimization of Closed-loop Supply Chain With Uncertain Demand Under Multi-channel Cross Influence," SAGE Open, , vol. 13(4), pages 21582440231, December.
    7. Milena Bieniek, 2021. "Bartering: Price-Setting Newsvendor Problem with Barter Exchange," Sustainability, MDPI, vol. 13(12), pages 1-22, June.

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