Article ID: | iaor20117382 |
Volume: | 39 |
Issue: | 4 |
Start Page Number: | 278 |
End Page Number: | 282 |
Publication Date: | Jul 2011 |
Journal: | Operations Research Letters |
Authors: | Shah Janat, Patil Rahul, Tiwari Divya |
Keywords: | forecasting: applications |
In this paper, we derive an optimal ordering policy for an unreliable newsboy who can place two sequential orders before the start of a single selling season by using a demand forecast update. Supply yield is modeled using a uniform distribution considering both the minimum order guarantee and the maximum yield. Our results indicate that a firm should focus on increasing the minimum order guarantee from a first stage supplier to reduce its total supply chain cost.