The newsvendor problem with advertising: an overview with extensions

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F70883521%3A28140%2F16%3A43874989" target="_blank" >RIV/70883521:28140/16:43874989 - isvavai.cz</a>

Alternative codes found

RIV/70883521:28140/17:43874989 RIV/00216305:26210/17:PU139945

Result on the web

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DOI - Digital Object Identifier

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Result language

angličtina

Original language name

The newsvendor problem with advertising: an overview with extensions

Original language description

The effect of advertising on sales has been the subject of recent studies as an important aspect in many demand-based problems. Herein, we deal with the newsvendor problem, due to its simple structure, as a suitable tool for illustrating how facets of marketing may affect decision-making concerning operational problems. In the setting presented, the newsvendor is faced with advertising-sensitive stochastic demand, where a demand-related random element comprises an advertising decision of the multiplicative or additive form. We assume that a suitable advertising strategy results in increased sales. Two advertising response functions are considered, these being concave downward and S-shaped. We review and extend the existing results relating to the newsvendor problem with marketing effects, which mostly pertain to the concave function. These are generalized by defining the S-shaped function, and some original insights into the effect of advertising are given. We establish that the optimal advertising expenditure for the multiplicative case is always less than or equal to the optimal amount in the equivalent deterministic model while it is always equal in the additive case. We finally illustrate the results that are obtained by providing numerical examples involving various advertising response functions, as well as management-related interpretations.

Czech name

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Czech description

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Type

J_x - Unclassified - Peer-reviewed scientific article (Jimp, Jsc and Jost)

CEP classification

BB - Applied statistics, operational research

OECD FORD branch

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Project

Result was created during the realization of more than one project. More information in the Projects tab.

Continuities

P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)

Publication year

2016

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Review of Managerial Science

ISSN

1863-6683

e-ISSN

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Volume of the periodical

"Neuveden"

Issue of the periodical within the volume

"Neuveden"

Country of publishing house

DE - GERMANY

Number of pages

21

Pages from-to

"Neuveden"

UT code for WoS article

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EID of the result in the Scopus database

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