Optimal ordering decision in multi-products competition environment

In a multi-product competition market, the retailers of products at first must know the state and the market shares of the products in the markets, then decide the quantities of product through analysis of the market and the revenue to gain the maximum profits. The fundamental problem in the market inventory management is how to gain the optimal order quantity. In this paper, through introducing the concepts of product characterization description and customer general cost, we give a method of market share and some mathematical properties of market share. Then we use the classical inventory management model–newsboy problem model to analyse the optimal ordering decision problem in the multi-products competition environment. In the last of this paper, we give the sensitive analysis and economic explanations of retailers' optimal ordering quantity, optimal expected profits and total profit in the market.