Production and Operations Management 2000

OPTIMAL AND HEURISTIC SOLUTIONS FOR THE MULTI‐ITEM NEWSVENDOR PROBLEM WITH A SINGLE CAPACITY CONSTRAINT

Steven J. Erlebacher^1,2

¹ Washington University in St. Louis · ² Center for Excellence in Education

Abstract

This research considers a multi‐item newsvendor problem with a single capacity constraint. While this problem has been addressed in the literature, the focus here is on developing simple, closed‐form expressions for the order quantities. The benefit of such an approach is that the solutions are straightforward to calculate and have managerial appeal. Additionally, we show these expressions to be optimal under a variety of conditions. For more general cases when these optimality conditions do not hold, we use these expressions as heuristic solutions. Via computational studies, we demonstrate that these heuristics are extremely effective when the optimality conditions are not satisfied.

DOI

10.1111/j.1937-5956.2000.tb00139.x

Sources

openalex

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APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓