Abstract
This paper deals with the newsboy problem and proposes a pedagogical approach for its teaching in engineer and business schools. In most cases, one studies the optimal order quantity that maximises the expected revenue. In some cases, one determines the expected cost itself, but never the associated risk. In this paper, we study the standard deviation of the expected cost for two classical models (including or not salvage revenue) and for three classical distributions (normal, uniform and exponential). The formulas can be drawn with any spreadsheet program and the student can evaluate the expected revenue and the risk associated with any ordering value. To illustrate the proposed formulas, numerical examples are given.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Services Operations and Informatics
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
