A New Proof for the Tight Range of Optimal Order Quantities for the Newsboy Problem with Mean and Standard Deviation

Jinfeng Yue

Department of Management and Marketing, Jennings A. Jones College of Business, Middle Tennessee State University, Murfreesboro, USA.

DOI: 10.4236/ajor.2012.22023                

Abstract

In the classical Newsboy problem, we provide a new proof for the tight range of optimal order quantities for the newsboy problem when only the mean and standard deviation of demand are available. The new proof is only based on the definition of the optimal solution therefore it is the most straightforward method. It is also shown that the classical Scarf’s rule is the mid-point of the range of optimal order quantities. This provides an additional understanding of Scarf’s order rule as a distribution free decision.

Keywords

Newsboy Problem; Distribution-Free Approach; Optimal Decision

Conflicts of Interest

The authors declare no conflicts of interest.

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