JOURNAL OF ACCOUNTING AND FINANCE
The Newsvendor Problem with Pricing and Secondary Revenues
Author(s): Craig Sorochuk, John G. Wilson
Citation: Craig Sorochuk, John G. Wilson, (2011) "The Newsvendor Problem with Pricing and Secondary Revenues" Vol. 11, Iss. 1, pp. 31 - 39
Article Type: Research paper
Publisher: North American Business Press
Abstract:
In the newsvendor problem with pricing, the seller of homogeneous primary items decides price
and inventory level before exact demand is known, with the goal of maximizing expected profit.
To this, we add that if and only if a customer purchases one of the primary items, he will also
spend a random amount on secondary items, giving the newsvendor a second source of revenues.
We present our model of this problem and provide numerical examples.