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Newsvendor pricing with fuzzy demand

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In this paper a single product pricing model is studied with fuzzy quantities. It is assumed that uncertainties may appear in demand. Fuzzy is used to describe a subjective estimate, linguistically expressed by the phrase demand is about d. Price is taken as the main criterion that is used to take expert opinion on demand. Decision variables of the model are the price of the product and the quantity that should be ordered for a fixed time period that maximizes the possible profit. The computational aspects of the fuzzy model and its interpretations are illustrated by an example.

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In this paper a single product pricing model is studied with fuzzy quantities. It is assumed that uncertainties may appear in demand. Fuzzy is used to describe a subjective estimate, linguistically expressed by the phrase demand is about d. Price is taken as the main criterion that is used to take expert opinion on demand. Decision variables of the model are the price of the product and the quantity that should be ordered for a fixed time period that maximizes the possible profit. The computational aspects of the fuzzy model and its interpretations are illustrated by an example.

Keywords

Newsvendor modelFuzzy logicDecision makerProfit (economics)EconomicsProduct (mathematics)Operations researchComputer science

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