S.I.M.O.N. : Stochastic Inventory Model of Newsboy

Authors

Ronald E. Mitchell, Jr.

Document Type

Report

Publication Date

1-1-1973

Abstract

This paper examines a stochastic inventory model, commonly referred to as the "newsboy problem," which addresses inventory management for perishable or short-lived goods. The model considers several key characteristics, including single-unit purchases and sales, instantaneous order receipt, short product lifespan, the inability to fulfill late orders, and fixed holding and setup costs irrespective of quantity. Salvaging unsold goods at the end of the period is also a factor. The paper presents single-period, two-period, and multiperiod models, each accompanied by examples and guidance on leveraging a computer program for calculations. The proposed system, SIMON (Stochastic Inventory Model of Newsboy), provides computational support for solving various stochastic inventory scenarios efficiently.

Keywords

Stochastic processes, Operations research, Business logistics--Mathematical models

Publication Title

Technical Memorandums from the Department of Operations, School of Management, Case Western Reserve University

Issue

Technical memorandum no. 285

Rights

This work is in the public domain and may be freely downloaded for personal or academic use

Recommended Citation

Mitchell, Jr., Ronald E., "S.I.M.O.N. : Stochastic Inventory Model of Newsboy" (1973). Research Reports from the Department of Operations. 556.
https://commons.case.edu/wsom-ops-reports/556