Joint Pricing and Purchasing Decisions for the Dual-Channel Newsvendor Model with Partial Information
We investigate a joint pricing and purchasing problem for the dual-channel newsvendor model with the assumption that only the mean and variance of the demand are known. The newsvendor in our model simultaneously distributes a single product through traditional retail and Internet. A robust optimizat...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Wiley
2014-01-01
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| Series: | Journal of Applied Mathematics |
| Online Access: | http://dx.doi.org/10.1155/2014/954073 |
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| _version_ | 1832552139576049664 |
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| author | Jixiang Zhou Yong Wang Xiaoming Yan |
| author_facet | Jixiang Zhou Yong Wang Xiaoming Yan |
| author_sort | Jixiang Zhou |
| collection | DOAJ |
| description | We investigate a joint pricing and purchasing problem for the dual-channel newsvendor model with the assumption that only the mean and variance of the demand are known. The newsvendor in our model simultaneously distributes a single product through traditional retail and Internet. A robust optimization approach that maximizes the worst-case profit is adapted under the aforementioned conditions to model demand uncertainty and linear clearing functions that characterize the relationship between demand and prices. We obtain a close-form expression for the robust optimal policy. Illustrative simulations and numerical experiments show the effects of several parameters on the optimal policy and on newsvendor performance. Finally, we determine that the gap between newsvendor performance under demand certainty and uncertainty is minimal, which shows that the robust approach can significantly improve performance. |
| format | Article |
| id | doaj-art-1540f5aad487484886d10fdab559cd8b |
| institution | Kabale University |
| issn | 1110-757X 1687-0042 |
| language | English |
| publishDate | 2014-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Journal of Applied Mathematics |
| spelling | doaj-art-1540f5aad487484886d10fdab559cd8b2025-02-03T05:59:20ZengWileyJournal of Applied Mathematics1110-757X1687-00422014-01-01201410.1155/2014/954073954073Joint Pricing and Purchasing Decisions for the Dual-Channel Newsvendor Model with Partial InformationJixiang Zhou0Yong Wang1Xiaoming Yan2School of Economics and Business Administration, Chongqing University, Chongqing 400044, ChinaSchool of Economics and Business Administration, Chongqing University, Chongqing 400044, ChinaSchool of Computer Science, Dongguan University of Technology, Dongguan, Guangdong 523808, ChinaWe investigate a joint pricing and purchasing problem for the dual-channel newsvendor model with the assumption that only the mean and variance of the demand are known. The newsvendor in our model simultaneously distributes a single product through traditional retail and Internet. A robust optimization approach that maximizes the worst-case profit is adapted under the aforementioned conditions to model demand uncertainty and linear clearing functions that characterize the relationship between demand and prices. We obtain a close-form expression for the robust optimal policy. Illustrative simulations and numerical experiments show the effects of several parameters on the optimal policy and on newsvendor performance. Finally, we determine that the gap between newsvendor performance under demand certainty and uncertainty is minimal, which shows that the robust approach can significantly improve performance.http://dx.doi.org/10.1155/2014/954073 |
| spellingShingle | Jixiang Zhou Yong Wang Xiaoming Yan Joint Pricing and Purchasing Decisions for the Dual-Channel Newsvendor Model with Partial Information Journal of Applied Mathematics |
| title | Joint Pricing and Purchasing Decisions for the Dual-Channel Newsvendor Model with Partial Information |
| title_full | Joint Pricing and Purchasing Decisions for the Dual-Channel Newsvendor Model with Partial Information |
| title_fullStr | Joint Pricing and Purchasing Decisions for the Dual-Channel Newsvendor Model with Partial Information |
| title_full_unstemmed | Joint Pricing and Purchasing Decisions for the Dual-Channel Newsvendor Model with Partial Information |
| title_short | Joint Pricing and Purchasing Decisions for the Dual-Channel Newsvendor Model with Partial Information |
| title_sort | joint pricing and purchasing decisions for the dual channel newsvendor model with partial information |
| url | http://dx.doi.org/10.1155/2014/954073 |
| work_keys_str_mv | AT jixiangzhou jointpricingandpurchasingdecisionsforthedualchannelnewsvendormodelwithpartialinformation AT yongwang jointpricingandpurchasingdecisionsforthedualchannelnewsvendormodelwithpartialinformation AT xiaomingyan jointpricingandpurchasingdecisionsforthedualchannelnewsvendormodelwithpartialinformation |