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Article

Abstract

The newsboy problem, also known as news-vendor or the single-period problem is a well-known inventory management problem. Interest in such a problem has increased over the past 40 years partially because the increased dominance of service industrial for which newsboy problem is very applicable in both retailing and service organization. Also, the reduction in product life cycles makes newsboy problem more relevant. Many extensions have been made in last decade, such as different objects and utility function, different supplier pricing policies, different new-vendor pricing policies [2][3][4]. However, almost all of extensions have been made in the probabilistic framework, that is, the uncertainty of demand and supply is characterized by the probability distribution, and the objective function is used to maximizing the expected profit or probability measure of achieving a target profit. There are still some problems left. The one is for life-cycle short products, such as fashion goods, season presents, there is no data to be used for statistical analysis to predict the coming demand. The other is newsboy problem is a typical one-shoot decision problem so that maximizing the expected profit or probability measure seems less meaningful. It seems that possibility theory-based method is another alternative to deal with such kind of decision problem. In this paper the plausible information of demand is dharacterized by the possibility distribution and the optimal order is determined according to the possibilistic decision criteria.

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