Uncertain Newsboy Model

Abstract

In this paper, we consider a new model of newsboy problem with uncertain variables under budget constraint. Since the demands of products are often uncertain in real life, the profit of the newsboy is uncertain. We develop expected profit model and investigate its deterministic equivalent class. In the model, the objective function is to maximize the expected profit of newsboy and the chance of achieving a target budget satisfies chance constraint with at least some given confidence level. Furthermore, a hybrid intelligent algorithm which integrates genetic algorithm and 99-method is designed for the model. Finally, an illustrating example is given to show the application of the proposed model and algorithm.