The newsvendor model revisited： the impacts of high unit holding costs on the accuracy of the classic model
The newsvendor model revisited： the impacts of high unit holding costs on the accuracy of the classic model作者机构：Division of Business and Management Beijing NormalUniversity-Hong Kong Baptist University United International College 2000 JinTong RoadTangjiawan Zhuhai Guangdong China
出 版 物：《Frontiers of Business Research in China》 (中国高等学校学术文摘·工商管理研究（英文版）)
年 卷 期：2018年第12卷第2期
页 面：141-154页
学科分类：0303[法学-社会学] 01[哲学] 0202[经济学-应用经济学] 1204[管理学-公共管理] 0302[法学-政治学] 1202[管理学-工商管理] 0101[哲学-哲学] 07[理学] 010108[哲学-科学技术哲学] 0701[理学-数学] 070101[理学-基础数学]
基 金：Zhuhai Outstanding Discipline Project-Accounting University of Illinois at Chicago, UIC Natural Science Foundation of Guangdong Province, (2015A030313823)
主 题：Newsvendor model Inventory control Stochastic model
摘 要：The newsvendor problem has been applied in various business settings. It is often assumed that the decision variable, i.e., order-up-to level, has no impacts on the holding costs for average inventory cycled in a given period, which is the difference between beginning and ending inventory levels on hand in that period. The average holding cost for this portion of inventory is conveniently and approximately calcutated as half the product of the unit holding cost and the expectation of the demand in one period if it is assumed that the inventory is approximately evenly consumed. It is a good approximation when the unit holding cost is significantly lower than the unit backorder cost as this optimal solution to inventory level is able to guarantee a low probability of understocking. However, if this condition does not hold, the approximation may deviate from the actual cost and cannot measure the expected holding cost for this portion of inventory. This paper examines the impact of the cycle stock holding cost on the newsvendor model and the conditions under which this portion of cost is not negligible.
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