The Newsboy Problem In Determining Optimal Quantity In Stochastic Inventory Problem For Fixed Demand

Abstract

This paper describes optimization problem related to newsboy model using the famous stochastic inventory problem in determining optimal order–up–to quantity when demand is a continuous random variable. This study was done by the use of a stochastic model. In view of this, data were collected and collated from cocoa board, Ilaro, Egbado-South, Nigeria and used to test the validity and applicability of the model.

Keywords: Stochastic, demand uncertainty, concave, optimal order-up-to quantity