Abstract
A newsboy problem model in which a vendor has limited resource is developed. It is assumed that the supplier will either sell the items to the vendor outright or offer the items to the vendor with return policy. In the latter case, the supplier buys back at certain percentage of original cost from the vendor the unsold items at the end of the selling season. The purpose of this study is to investigate how the vendor should replenish the items with return policy, constrained resources and changing procured price. Three numerical examples are provided. In one example with two constrained variables, an optimal solution is derived by using KKT (Karush-Kuhn-Tucker) conditions. The other two multiple variables examples with a minimum service level or a limited budget are solved using GA (genetic algorithm).
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Emmons, H., Gilbert, S.M.: The role of returns policies in pricing and inventory decisions for catalogue goods. Management Science 44(2), 277–283 (1998)
Mantrala, M.K., Raman, K.: Demand uncertainty and supplier’s returns policies for a multi-store style-good retailer. European Journal of Operational Research 115, 270–284 (1999)
Pasternack, B.A.: Optimal pricing and return policies for perishable commodities. Marketing Science 4(2), 166–176 (1985)
Khouja, M.: The single-period (news-vendor) problem: literature review and suggestions for future research. The International Journal of Management Science 27, 537–553 (1999)
Khouja, M.: The newsboy problem under progressive multiple discounts. European Journal of Operational Research 84, 458–466 (1995)
Khouja, M., Mehrez, A.: A multi-product constrained newsboy problem with progressive multiple discounts. Computers & Industrial Engineering 30, 95–101 (1996)
Lau, H.-S., Lau, A.H.-L.: The newsstand problem: A capacitated multi-product single-period inventory problem. European Journal of Operational Research 94, 29–42 (1996)
Pasternack, B.A.: The capacitated newsboy problem with revenue sharing. Journal of Applied Mathematics and Decision Sciences 5(10), 21–33 (2001)
Holland, J.H.: Adaptation in Natural and Artificial Systems. University of Michigan Press, Ann Arbor (1975)
Jinxing, X., Jiefang, D.: Heuristic genetic algorithm for general capacitated lot-sizing problems. Computers and Mathematics with Applications 44, 263–276 (2002)
Li, Y., Man, K.F., Tang, K.S.: Genetic algorithm to production planning and scheduling problems for manufacturing systems. Production Planning & Control 11(5), 443–458 (2000)
Author information
Authors and Affiliations
Editor information
Rights and permissions
Copyright information
© 2007 Springer Berlin Heidelberg
About this paper
Cite this paper
Yang, P.C., Wee, H.M., Chung, S.L., Kang, S.H. (2007). Constrained Optimization of a Newsboy Problem with Return Policy Using KKT Conditions and GA. In: Okuno, H.G., Ali, M. (eds) New Trends in Applied Artificial Intelligence. IEA/AIE 2007. Lecture Notes in Computer Science(), vol 4570. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-73325-6_23
Download citation
DOI: https://doi.org/10.1007/978-3-540-73325-6_23
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-73322-5
Online ISBN: 978-3-540-73325-6
eBook Packages: Computer ScienceComputer Science (R0)