TY - GEN
T1 - A hybrid simulation framework for the newsvendor problem with advertising and viral marketing
AU - Negahban, Ashkan
PY - 2013
Y1 - 2013
N2 - The newsvendor problem is known as one the classical problems in the inventory management context which has received a great deal of attention during the past few decades. In this paper, a two-level simulation-based framework is proposed, where in the first level, agent-based simulation is developed to model the effect of advertising intensity and word-of-mouth on the demand in order to estimate the demand distribution under various levels of advertising intensity. The results from the agent-based model are then plugged into a Monte Carlo simulation model in order to make the final decision on the optimal advertising intensity and economical order quantity with the objective to maximize the expected profit. The proposed approach is then applied to a hypothetical newsvendor problem to illustrate its applicability as a decision support tool for solving real-world newsvendor problems.
AB - The newsvendor problem is known as one the classical problems in the inventory management context which has received a great deal of attention during the past few decades. In this paper, a two-level simulation-based framework is proposed, where in the first level, agent-based simulation is developed to model the effect of advertising intensity and word-of-mouth on the demand in order to estimate the demand distribution under various levels of advertising intensity. The results from the agent-based model are then plugged into a Monte Carlo simulation model in order to make the final decision on the optimal advertising intensity and economical order quantity with the objective to maximize the expected profit. The proposed approach is then applied to a hypothetical newsvendor problem to illustrate its applicability as a decision support tool for solving real-world newsvendor problems.
UR - http://www.scopus.com/inward/record.url?scp=84894158782&partnerID=8YFLogxK
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U2 - 10.1109/WSC.2013.6721544
DO - 10.1109/WSC.2013.6721544
M3 - Conference contribution
AN - SCOPUS:84894158782
SN - 9781479939503
T3 - Proceedings of the 2013 Winter Simulation Conference - Simulation: Making Decisions in a Complex World, WSC 2013
SP - 1613
EP - 1624
BT - Proceedings of the 2013 Winter Simulation Conference - Simulation
T2 - 2013 43rd Winter Simulation Conference - Simulation: Making Decisions in a Complex World, WSC 2013
Y2 - 8 December 2013 through 11 December 2013
ER -