Abstract
This paper considers a multiperiod newsvendor problem with partially observed supply capacity information that evolves as a Markovian process. The supply capacity is fully observed by the buyer when the capacity is smaller than the buyer's ordering quantity. Otherwise, the buyer knows that the current-period supply capacity is greater than its ordering quantity. Based on these two observations, the buyer updates the future supply-capacity forecasting accordingly. With a dynamic programming formulation, we prove the existence of a unique optimal ordering policy.
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