Single-period inventory problem under uncertain environment

Abstract

This paper investigates the single period inventory Newsboy problem in a general uncertain environment. Here it is assumed that the uncertainty appears in the market demand of the product. Uncertain demand is used to describe a subjective estimate (not estimated by random/fuzzy demand), linguistically expressed by “demand is about ξ”. Using identification functions of the uncertain variable we derive the optimum order quantity and finally the expression of total expected profit for a fixed time period. The computational aspects of the model in uncertain environment and their interpretations are illustrated by some examples.