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Journal of Applied Mathematics
Volume 2014, Article ID 954073, 12 pages
Research Article

Joint Pricing and Purchasing Decisions for the Dual-Channel Newsvendor Model with Partial Information

1School of Economics and Business Administration, Chongqing University, Chongqing 400044, China
2School of Computer Science, Dongguan University of Technology, Dongguan, Guangdong 523808, China

Received 19 March 2014; Revised 17 July 2014; Accepted 17 July 2014; Published 24 August 2014

Academic Editor: Guiomar Martín-Herrán

Copyright © 2014 Jixiang Zhou et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


We investigate a joint pricing and purchasing problem for the dual-channel newsvendor model with the assumption that only the mean and variance of the demand are known. The newsvendor in our model simultaneously distributes a single product through traditional retail and Internet. A robust optimization approach that maximizes the worst-case profit is adapted under the aforementioned conditions to model demand uncertainty and linear clearing functions that characterize the relationship between demand and prices. We obtain a close-form expression for the robust optimal policy. Illustrative simulations and numerical experiments show the effects of several parameters on the optimal policy and on newsvendor performance. Finally, we determine that the gap between newsvendor performance under demand certainty and uncertainty is minimal, which shows that the robust approach can significantly improve performance.