Linking Advertising to the Single-Period Inventory Problem with Resalable Returns and Emergency Supply Option

• Main Authors: Yung-Hsuan Pang, 彭勇璇
• Other Authors: Liang-Hsuan Chen
• Format: Others
• Language: en_US
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/46711893854978775891

碩士 === 國立成功大學 === 工業與資訊管理學系碩博士班 === 95 === Since the emerging of internet, online catalogues have contributed substantial profit in total sales of manufacturing industries. One of the topics that have been studied in this area is the single-period problem. The classical single-period problem (SPP) or the so-called newsboy/newsvendor problem is to find a product’s order quantity that maximizes the expected profit under probabilistic demand. One of the characteristics of fashionable products is that they can only be sold within a single selling period. Managers have to predict the optimal quantity of products in advance. The problem can be more complicated for these style products since returns may also be used to satisfy new demand, occurred before the end of selling period. In other case, it is unavoidable that there is a possibility of shortage due to extremely high demand during the period. Here, vendor provides emergency supply option to satisfy a proportion of customers who are willing to wait. Since there are some vendors selling these products within an area, consequently, the rest of customers, unwilling to wait to order in one store, may seek the products in others. In this research, we extend the classical single-period problem to determine the optimal order quantity and advertising expenditure by incorporating return policies, emergency supply options, and the effect of advertising under the objective of maximizing the expected profit. We provide solutions to the problem under uniform and normal demand distributions. A numerical example is used to illustrate the model, and the associated sensitivity analyses in terms of some important parameters are also made.