A Fuzzy Approach to Bi-Objective Newsboy Problem

The single period stochastic inventory problem is referred to as ”Newsboy” or ”Newsvendor” problem in the literature, and can be expressed as determining optimal order quantities under stochastic demand. Due to single order opportunity, the order quantity should be determined for the entire period. Most studies use the expected profit as the performance measure in the solution of the Newsboy problem. However, managers and decision makers may be more concerned with a probability level to achieve a specific target profit as another performance measure beside the expected profit. These two performance measures conflict with each other, and cannot be optimized simultaneously. Therefore, a Fuzzy Bi-Objective Programming model has been developed to find a good compromise solution to the problem. Two cases have been presented to show use of the proposed model under uniform and exponential demand