Title: Product selection for newsboy-type products with normal demands and unequal costs
Authors: Su, Rung Hung
Pearn, Wen Lea
Department of Industrial Engineering and Management
Keywords: Inventory;Newsboy;Normal demand;Product selection
Issue Date: 1-Aug-2011
Abstract: In this paper, we consider two newsboy-type products with unequal prices and costs. Both demands are independent and follow normal distributions with unknown parameters it and a. We study the product selection problem which deals with comparing two products and selecting the one that has a significantly higher profitability, in which the profitability is defined to the probability of achieving a target profit under the optimal ordering policy. The statistical hypothesis testing methodology is performed to tackle this selection problem. Critical value of the test is calculated to determine the selection decision. Sample size required for a designated power and confidence level is also investigated. An application example on comparing English-teaching magazines is presented to illustrate the practicality of our approach. (C) 2011 Elsevier B.V. All rights reserved.
URI: http://dx.doi.org/10.1016/j.ijpe.2011.04.010
ISSN: 0925-5273
DOI: 10.1016/j.ijpe.2011.04.010
Volume: 132
Issue: 2
Begin Page: 214
End Page: 222
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