Title: The distribution free newsboy problem with partial information

Authors: Diatha Krishna Sundar; K. Ravikumar; Siddharth Mahajan

Addresses: Indian Institute of Management, Bannerghatta Road, Bangalore, 560076, India ' TCS Innovation Labs, Tata Consultancy Services, 3rd Floor, Abhilash Building, Whitefield Road, Bangalore 560066, India ' Indian Institute of Technology, Hauz Khas, New Delhi 110016, India

Abstract: We present a new ordering rule for the newsboy problem where besides the mean and variance of demand, the probability that the demand assumes the value zero is known. We derive a lower bound for the expected profit over the set of distributions with given parameters and construct a distribution which achieves the bound. We apply our analysis to an M/G/1 queue with server vacations, which is the base model for many production-inventory systems.

Keywords: newsboy problem; inventory control; server vacations; M/G/1 queue.

DOI: 10.1504/IJOR.2018.096488

International Journal of Operational Research, 2018 Vol.33 No.4, pp.481 - 496

Received: 23 Apr 2015
Accepted: 03 Oct 2015
Published online: 05 Dec 2018 *

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