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Newsboy Model for Easy-Deteriorated Items under Retail Price Discounts Strategy

Yong Ye, Youhua Zhang

Abstract


Perishable products’ inventory management is more complicated than ordinary products, as makes temperature and price discounts strategy in supply chain more different. Classical newsboy model doesn’t thinking of selling short cycle characteristics for easy-deteriorated items. This study analyzes questions of retailer’s maximize profits in the two-stage supply chain based on price discounts and the time limit. The aim of our work is to determine discount times in different period of day. The model assumes the distribution function satisfying uniform distribution and adds the price elasticity of demand to calculate the order amount’s change. It uses iterative method to solving the best order quantity of the retailers. Finally it takes numeric calculations for example to explain the factors influencing the price elasticity of demand.



Keywords


Newsboy Model, Easy-Deteriorated Items, Price Discounts.

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