A multi-period newsvendor problem with pre-season extension under fuzzy demand

Abstract

This paper proposes a fuzzy multi-period newsvendor model with pre-season extension for innovative products. The demand of the product is represented by fuzzy numbers with triangular membership function. The holding and shortage cost parameters are considered as imprecise and also represented by triangular fuzzy numbers. As the selling season draws closer, suppliers lead times shortens and thus production costs increase. In contrast, caused by the oncoming selling season, demand fuzziness decreases and more accurate demand forecasts can be maintained that lead to lower overage/underage costs. The objective of the model is to find the best order period and the best order quantity that will minimize the fuzzy expected total cost. The model is experimented with an illustrative example and supported by sensitivity analyses.