Single-period two-product newsvendor model with assorted shelf life and substitution effect
碩士 === 長庚大學 === 商管專業學院 === 107 === In this thesis, a classical single-period newsvendor problem is considered when there are two products deteriorating over time, and one can be substituted to the other, if only one of them is not available. Shelf life time of two products varies while substitution...
| Main Authors: | , |
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| Format: | Others |
| Language: | en_US |
| Published: |
2019
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| Online Access: | http://ndltd.ncl.edu.tw/handle/u8qufs |
| Summary: | 碩士 === 長庚大學 === 商管專業學院 === 107 === In this thesis, a classical single-period newsvendor problem is considered when there are two products deteriorating over time, and one can be substituted to the other, if only one of them is not available. Shelf life time of two products varies while substitution rate is reviewed under two different circumstances: peaks at the middle and at the end of season. In each circumstance, two scenarios are further analyzed: Total of two products’ shelf time equals to duration of season and total of two products’ shelf time is greater than duration of season. Critical fractile method and arithmetic sequence summation are used in this paper to calculate the optimal order quantity and probability of substitution of two products, respectively.
The objective of this study is to find optimal order quantities under given settings of two products and ordering time of the second product. Several suggestions to retailers are also provided after numerical illustration.
The finding of this paper suggests that expected profit is higher when substitution rate peaks at the end of season than that of when substitution rate peaks at the middle of season. Besides that, a longer shelf life time results in better profit in general.
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