Article ID Journal Published Year Pages File Type
5128462 Operations Research Letters 2017 6 Pages PDF
Abstract

We study the impact of suboptimal decisions in the newsvendor model, one of the popular inventory models. We establish a lower bound for the deviation of inventory cost from its minimum, when the order quantity is suboptimal. Demonstration of the bound shows the model to be sensitive to suboptimal decisions.

Keywords
Related Topics
Physical Sciences and Engineering Mathematics Discrete Mathematics and Combinatorics
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On the impact of suboptimal decisions in the newsvendor model
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