Effects of centralization on expected profits in a multi-location newsboy problem

Abstract

This paper develops a single-period, single-product inventory model with several individual sources of demand. It is a multi-location problem with an opportunity for centralization. Both decentralized and centralized inventory systems are also examined to extend the Ravindram, Phillips and Solberg (RPS) model to constitute a new inventory model. Two theorems that include the results of the RPS model are proved in the new inventory model.

Keywords:

• newsboy problem
• inventory model