Strategies for a blind newsboy

Three variations of the newsboy problem, the newsboy problem with fixed container size, the problem of the justin-time newsboy and the newsboy problem with demand-dependent pricing are analyzed with respect to the value of information. This is determined by comparing the profit of a blind newsboy, who only knows the demand distribution, with the profit of a clear-sighted newsboy, who can accurately predict sales. It is shown that the disadvantage of the blind newsboy is diminished by just-in-time supplies or demand-dependent pricing. (C) 1998 Elsevier Science Ltd. All rights reserved.