A multi-product constrained newsboy problem with progressive multiple discounts

Abstract

Many extensions to the newsboy problem have been solved in the literature. Two of those extensions solve a multi-product newsboy problem with a storage or budget constraint, and a single-product newsboy problem in which multiple discounts are used to sell excess inventory. In this paper, we formulate and solve a multi-product newsboy problem in which multiple discounts are used to sell excess inventory under a storage or budget constraint. We provide an efficient algorithm to solve the new problem and illustrate the results with numerical examples.