Abstract
The paper investigates the classical newsboy problem in the light of cooperative advertising policy in a two layer supply chain where the manufacturer and the retailer are the members of the chain. As the shelf-life of newsboy products is very short, so advertising has immense importance for the newsboy problem. The prime objective of this paper is to introduce an advertising policy that will increase sales and eventually avoid the chance of overstocking of products. Another prospect of the advertising policy is that it will also help companies to attract a wider range of target customers by highlighting the different lucrative characteristics of their product. In this paper, an expected average channel profit has been calculated and maximized analytically. Numerical examples are considered in order to test the model and one of them is illustrated graphically. Finally, sensitivity analysis of the model with respect to key parameters of the system is carried out.
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