CoChat
Sign Up
Cited by 240Supply Chain and Inventory ManagementConsumer Market Behavior and PricingSustainable Supply Chain Management

The DOI matches its Crossref record; 35 of the 35 references it cites were found in a registry or an index.

Note: The Newsvendor Model with Endogenous Demand

Dana, James D., Petruzzi, Nicholas C.·2001·Management Science
DOI 10.1287/mnsc.47.11.1488.10252
Open this paper in CoChat — free account

Abstract

This paper considers a firm's price and inventory policy when it faces uncertain demand that depends on both price and inventory level. The authors extend the classic newsvendor model by assuming that expected utility maximizing consumers choose between visiting the firm and consuming an exogenous outside option. The outside option represents the utility the consumer forgoes when she chooses to visit the firm before knowing whether or not the product will be available. The authors investigate both the case in which the firm's price is exogenous and the case in which price is chosen optimally. The paper makes two contributions. First, the authors show that the firm holds more inventories, provides a higher fill rate, attracts more customers, and earns higher profits when it internalizes the effect of its inventory on demand. Second, the authors show that in the endogenous price case the firm's two-dimensional decision problem can be reduced to two, sequential, single-variable optimizations. As a result, the endogenous-price case is as easy to solve as the exogenous-price case.

Overview

Integrity signals

Registry

Crossref · 10.1287/mnsc.47.11.1488.10252

Cites

35 of 35 references verified0 citation errors · 0 not checkable

Statistics

Recomputing p-values needs the paper’s full text.

Verification

Claims the paper makes

This paper’s full text isn’t openly available, so its claims and self-check weren’t run. The registry and citation checks still apply.

Claims other papers make about this one

Each is checked against this paper’s own text: does it say what the citing paper says it does?

  • The feature of approximating price response where demand rate also depends on inventory level is novel since most literature on inventory-dependent demand is for the single-period newsvendor.

    “We believe this feature constitutes a novel feature of the model since most of the literature on inventory-dependent demand is for the single-period newsvendor (e.g., Dana and Petruzzi 2001).”

    From Clearance Pricing Optimization for a Fast-Fashion Retailer (2012) · cites this paper as Dana and Petruzzi 2001

Citations

Cites

Flagged first, then by citations

Research works printed but not linked: 8

  1. Balakrishnan A., 2000, Lot sizing with demand-stimulating inventories
  2. Carlton D. W., 1978, Amer. Econom. Rev., 68, 571
  3. Eilon S., 1965, Oper. Res.-Verfahen, 3, 65
  4. Fergani Y. A market oriented stochastic inventory model (1976) (Stanford University, Stanford, CA) . Ph.D. dissertation
  5. Mahajan S., Oper. Res.
  6. Nahmias S., 1997, Production amd Operations Analysis
  7. Porteus E. L., 1990, Handbooks in OR and MS, 2, 605
  8. Young L., 1978, New Zealand Oper. Res., 6, 157

Cited by

Sorted by citations

Related

Metadata

Authors
Dana, J. D., & Petruzzi, N. C.
Affiliations
  • Northwestern University (US)
  • University of Illinois Urbana-Champaign (US)
ORCID
Petruzzi, Nicholas C.
Venue
Management Science
Publisher
Institute for Operations Research and the Management Sciences (INFORMS)
Published
2001-11
Volume
47
Issue
11
Pages
1488-1497
ISSN
  • 0025-1909 (ISSN-L)
  • 1526-5501
DOI
10.1287/mnsc.47.11.1488.10252
OpenAlex
W2119350633
Cited by
239
References
35
Citations by year
2026: 5 · 2025: 4 · 2024: 5 · 2023: 9 · 2022: 8 · 2021: 14 · 2020: 8 · 2019: 7 · 2018: 13 · 2017: 16 · 2016: 15 · 2015: 13 · 2014: 13 · 2013: 11 · 2012: 21
FWCI
7.79
Type
journal article
Language
en
Open access
closed
Locations
Management Science (publishedVersion)
Topics
  • Social Sciences › Decision Sciences › Management Science and Operations Research › Supply Chain and Inventory Management
  • Social Sciences › Business, Management and Accounting › Marketing › Consumer Market Behavior and Pricing
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Sustainable Supply Chain Management
Keywords
newsvendor model, endogenous demand, inventory management, fill rate, expected utility, outside options, optimal pricing, sequential optimization, demand uncertainty, customer acquisition

About these checks

Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.

Statistics and arithmetic are recomputed, not judged.

Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.

What counts as a claim ›How we measure confidence ›How we check this ›

Are you an author, or do you see a problem with this page? Request a review