View in EDS HTML Full Text PDF Full Text

Conservative profitability estimation using Bayesian approach for a newsboy-type product in supply chain.

Saved in:
Bibliographic Details
Title: Conservative profitability estimation using Bayesian approach for a newsboy-type product in supply chain.
Authors: Su, Rung-Hung1 (AUTHOR), Wu, Chia-Huang2 (AUTHOR) jacalwu@nctu.edu.tw, Shih, Ting-Hui1 (AUTHOR)
Source: Annals of Operations Research. Jun2026, Vol. 361 Issue 3, p1749-1771. 23p.
Subjects: Bayesian analysis, Profitability, Supply chain management, Sensitivity analysis, Manufacturing industries, Inventory control, Newsvendor model
Abstract: Effective inventory management can strengthen supply chain resilience. One of the main factors affecting the profit of the overall supply chain is the sold products at the retail end. Therefore, optimizing the order/manufacturing quantities of stock throughout the supply chain to minimize operation costs, and selecting highly profitable products to launch the market are crucial. The achievable capacity index (ACI) is a measurement tool to characterize the profitability of a newsboy-type product with normally distributed demand under optimal order/manufacturing conditions. From a frequentist perspective, the lower confidence bound (LCB) on ACI has been derived to express a conservative estimate of profitability. However, the indeterminacy of information pertaining to demand means that Bayesian statistical techniques could also be considered. Our primary objective in this study was to investigate the measurement of LCB on ACI using the Bayesian approach. The results of extensive numerical simulations under various sample sizes, credible levels, and estimates have also been tabulated as a reference for retailers. Besides, ACI can also be applied in the manufacturing industry. The manufacturer can adopt ACI to assess the profitability of a production order, in particular the contract order involving the manufacturing item comprised of single-period material. Therefore, this paper provides an example application involving the manufacture of car body kits to illustrate the practicality of the proposed method. Sensitivity analysis was also performed on various cost and statistical parameters to derive managerial implications and guidance for decision-making. [ABSTRACT FROM AUTHOR]
Copyright of Annals of Operations Research is the property of Springer Nature and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Database: Engineering Source
Full text is not displayed to guests.
FullText Links:
  – Type: pdflink
Text:
  Availability: 1
Header DbId: egs
DbLabel: Engineering Source
An: 194452353
AccessLevel: 6
PubType: Academic Journal
PubTypeId: academicJournal
PreciseRelevancyScore: 0
IllustrationInfo
Items – Name: Title
  Label: Title
  Group: Ti
  Data: Conservative profitability estimation using Bayesian approach for a newsboy-type product in supply chain.
– Name: Author
  Label: Authors
  Group: Au
  Data: <searchLink fieldCode="AR" term="%22Su%2C+Rung-Hung%22">Su, Rung-Hung</searchLink><relatesTo>1</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Wu%2C+Chia-Huang%22">Wu, Chia-Huang</searchLink><relatesTo>2</relatesTo> (AUTHOR)<i> jacalwu@nctu.edu.tw</i><br /><searchLink fieldCode="AR" term="%22Shih%2C+Ting-Hui%22">Shih, Ting-Hui</searchLink><relatesTo>1</relatesTo> (AUTHOR)
– Name: TitleSource
  Label: Source
  Group: Src
  Data: <searchLink fieldCode="JN" term="%22Annals+of+Operations+Research%22">Annals of Operations Research</searchLink>. Jun2026, Vol. 361 Issue 3, p1749-1771. 23p.
– Name: Subject
  Label: Subjects
  Group: Su
  Data: <searchLink fieldCode="DE" term="%22Bayesian+analysis%22">Bayesian analysis</searchLink><br /><searchLink fieldCode="DE" term="%22Profitability%22">Profitability</searchLink><br /><searchLink fieldCode="DE" term="%22Supply+chain+management%22">Supply chain management</searchLink><br /><searchLink fieldCode="DE" term="%22Sensitivity+analysis%22">Sensitivity analysis</searchLink><br /><searchLink fieldCode="DE" term="%22Manufacturing+industries%22">Manufacturing industries</searchLink><br /><searchLink fieldCode="DE" term="%22Inventory+control%22">Inventory control</searchLink><br /><searchLink fieldCode="DE" term="%22Newsvendor+model%22">Newsvendor model</searchLink>
– Name: Abstract
  Label: Abstract
  Group: Ab
  Data: Effective inventory management can strengthen supply chain resilience. One of the main factors affecting the profit of the overall supply chain is the sold products at the retail end. Therefore, optimizing the order/manufacturing quantities of stock throughout the supply chain to minimize operation costs, and selecting highly profitable products to launch the market are crucial. The achievable capacity index (ACI) is a measurement tool to characterize the profitability of a newsboy-type product with normally distributed demand under optimal order/manufacturing conditions. From a frequentist perspective, the lower confidence bound (LCB) on ACI has been derived to express a conservative estimate of profitability. However, the indeterminacy of information pertaining to demand means that Bayesian statistical techniques could also be considered. Our primary objective in this study was to investigate the measurement of LCB on ACI using the Bayesian approach. The results of extensive numerical simulations under various sample sizes, credible levels, and estimates have also been tabulated as a reference for retailers. Besides, ACI can also be applied in the manufacturing industry. The manufacturer can adopt ACI to assess the profitability of a production order, in particular the contract order involving the manufacturing item comprised of single-period material. Therefore, this paper provides an example application involving the manufacture of car body kits to illustrate the practicality of the proposed method. Sensitivity analysis was also performed on various cost and statistical parameters to derive managerial implications and guidance for decision-making. [ABSTRACT FROM AUTHOR]
– Name: AbstractSuppliedCopyright
  Label:
  Group: Ab
  Data: <i>Copyright of Annals of Operations Research is the property of Springer Nature and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.</i> (Copyright applies to all Abstracts.)
PLink https://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=egs&AN=194452353
RecordInfo BibRecord:
  BibEntity:
    Identifiers:
      – Type: doi
        Value: 10.1007/s10479-025-06503-0
    Languages:
      – Code: eng
        Text: English
    PhysicalDescription:
      Pagination:
        PageCount: 23
        StartPage: 1749
    Subjects:
      – SubjectFull: Bayesian analysis
        Type: general
      – SubjectFull: Profitability
        Type: general
      – SubjectFull: Supply chain management
        Type: general
      – SubjectFull: Sensitivity analysis
        Type: general
      – SubjectFull: Manufacturing industries
        Type: general
      – SubjectFull: Inventory control
        Type: general
      – SubjectFull: Newsvendor model
        Type: general
    Titles:
      – TitleFull: Conservative profitability estimation using Bayesian approach for a newsboy-type product in supply chain.
        Type: main
  BibRelationships:
    HasContributorRelationships:
      – PersonEntity:
          Name:
            NameFull: Su, Rung-Hung
      – PersonEntity:
          Name:
            NameFull: Wu, Chia-Huang
      – PersonEntity:
          Name:
            NameFull: Shih, Ting-Hui
    IsPartOfRelationships:
      – BibEntity:
          Dates:
            – D: 21
              M: 06
              Text: Jun2026
              Type: published
              Y: 2026
          Identifiers:
            – Type: issn-print
              Value: 02545330
          Numbering:
            – Type: volume
              Value: 361
            – Type: issue
              Value: 3
          Titles:
            – TitleFull: Annals of Operations Research
              Type: main
ResultId 1