Multi-product Newsvendor problem with dynamic pricing: a decision interpolation approximation

Laura N. Sprenkels; Zümbül Atan; Ivo J.B.F. Adan

doi:10.1007/s11590-025-02185-6

Multi-product Newsvendor problem with dynamic pricing: a decision interpolation approximation

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Abstract

In this paper we present an approximation for the finite horizon, finite inventory multi-product dynamic pricing problem. We consider both price- and stock-out- based substitutions. The computation time of the optimal solution grows exponentially in the number of products, while computation time of the proposed approximation is linear in the number of products. We compare the approximation with existing methods.

Original language	English
Pages (from-to)	699-716
Number of pages	18
Journal	Optimization Letters
Volume	19
Issue number	4
Early online date	4 Feb 2025
DOIs	https://doi.org/10.1007/s11590-025-02185-6
Publication status	Published - May 2025

Keywords

Inventory management
Multi-product
Newsvendor
Pricing

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10.1007/s11590-025-02185-6

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title = "Multi-product Newsvendor problem with dynamic pricing: a decision interpolation approximation",

abstract = "In this paper we present an approximation for the finite horizon, finite inventory multi-product dynamic pricing problem. We consider both price- and stock-out- based substitutions. The computation time of the optimal solution grows exponentially in the number of products, while computation time of the proposed approximation is linear in the number of products. We compare the approximation with existing methods.",

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AB - In this paper we present an approximation for the finite horizon, finite inventory multi-product dynamic pricing problem. We consider both price- and stock-out- based substitutions. The computation time of the optimal solution grows exponentially in the number of products, while computation time of the proposed approximation is linear in the number of products. We compare the approximation with existing methods.

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KW - Multi-product

KW - Newsvendor

KW - Pricing

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Multi-product Newsvendor problem with dynamic pricing: a decision interpolation approximation

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