A two-echelon newsvendor problem with limited budget and capacity

Abstract

In this paper, two-echelon newsvendor problem is considered. Many real-life situations like fashion, food industries, and healthcare services match newsvendor problem. Our problem is determining levels of inventory in order to optimize the profit and service level in selling a product. This product is made up of several raw materials. Only the distribution of demand is known, and the hot season of selling the product is just a short period and after that, the price of the product drops dramatically. The storage space and initial budget are limited. We modeled and solved the problem as an unconstrained nonlinear optimization problem using two nonlinear techniques, the sequential unconstrained minimization technique (SUMT) and steepest descent (SD).

A new model to design the suppliers portfolio in newsvendor problem based on product reliability

“…The proposed model includes two budget constraints and storage capacity. To solve the proposed model, an accurate and innovative solution approach has been developed [64]. Given that a lot of studies has been done on the newsvendor problem, but in the field of selecting suppliers according to MCDM, no studies have been done.…”