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http://dx.doi.org/10.11627/jkise.2013.36.1.36

Robust Newsvendor Model with Customer Balking by the Bi-levels of Inventory Threshold  

Jung, Uk (Department of Management, Dongguk University-Seoul)
Lee, Se Won (Department of Management, Dongguk University-Seoul)
Publication Information
Journal of Korean Society of Industrial and Systems Engineering / v.36, no.1, 2013 , pp. 36-43 More about this Journal
Abstract
Many retailer store managers are experiencing the situation where some customers balk at purchasing products if the stock is low. In this paper, we extend the single period newsvendor model in an environment of customer balking behavior occurring at double threshold inventory levels assuming the chance of sales during balking is a discrete function of inventory level. Our analysis is based on the assumption that only the mean and the variance of demand are known, without assuming any specific distributional form. We derive the explicit general expression of optimal order quantity with unknown distribution of demand with double threshold inventory levels of customer balking. Then, we illustrate the concepts developed here through simple numerical examples and conclude the future research topics under balking situation.
Keywords
Distribution-free Approach; Newsboy Problem; Inventory; Balking; Bi-threshold Inventory Levels;
Citations & Related Records
Times Cited By KSCI : 1  (Citation Analysis)
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