MS (Master of Science)
Date of Award
Committee Chair or Co-Chairs
Michelle Joyner, Anant Godbole, JeanMarie Hendrickson
Newsvendor problems in Operations Research predict the optimal inventory levels necessary to meet uncertain demands. This thesis examines an extended version of a single period multi-product newsvendor problem known as the ice cream vendor problem. In the ice cream vendor problem, there are two products – ice cream and hot chocolate – which may be substituted for one another if the outside temperature is no too hot or not too cold. In particular, the ice cream vendor problem is a data-driven extension of the conventional newsvendor problem which does not require the assumption of a specific demand distribution, thus allowing the demand for ice cream and hot chocolate respectively to be temperature dependent. Using Discrete Event Simulation, we first simulate a real-world scenario of an ice cream vendor problem via a demand whose expected value is a function of temperature. A sample average approximation technique is subsequently used to transform the stochastic newsvendor program into a feature-driven linear program based on the exogenous factors of probability of rainfall and temperature. The resulting problem is a multi-product newsvendor linear program with L1-regularization. The solution to this problem yields the expected cost to the ice cream vendor as well as the optimal order quantities for ice cream and hot chocolate, respectively.
Thesis - unrestricted
Azasoo, Makafui, "Data Science and the Ice-Cream Vendor Problem" (2021). Electronic Theses and Dissertations. Paper 3957. https://dc.etsu.edu/etd/3957
Copyright by the authors.