Encyclopedia of Operations Research and Management Science

2001 Edition
| Editors: Saul I. Gass, Carl M. Harris

Newsboy problem

Reference work entry
DOI: https://doi.org/10.1007/1-4020-0611-X_669

Items, here newspapers, have to be procured at the beginning of a time period and are discarded (or sold at a discounted price) at the end of the time period. The demand is assumed to be a random variable with known distribution. The problem is to determine how many items to stock at the beginning of the time period to minimize expected cost. This leads to a closed-form, single-period inventory model with stochastic demand. The problem statement also applies to items such as Christmas trees, time-dependent fashions, and items that can be stored until the next season like snow tires and Chanukah candles. Inventory modeling.

Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  1. 1.Robert H. Smith School of BusinessUniversity of MarylandCollege PartUSA
  2. 2.School of Information Technology & EngineeringGeorge Mason UniversityFairfaxUSA