Robust Optimization for the Newsvendor Problem with Discrete Demand

Abstract EN

A robust newsvendor model with discrete demand is initiatively studied, and the steps to obtain the optimal ordering decision are provided.

The study shows that the optimal ordering decision with discrete demand is very different from that with continuous demand.

Besides, the total number of demand points has almost no effect on the performance of both ordering decisions.

Furthermore, for an ultralow-profit product, the ordering decision with discrete demand performs significantly better than that with continuous demand.