An efficient heuristic for the multi-product satiating newsboy problem

Abstract

Preference of satiation of a target performance over maximization of expected performance in uncertain situations is well-documented in the economics literature. However, the newsboy problem with satiation (of a pro t target) objective has not received its due attention. In the multi-product setting, solution methods available in the literature are ine cient. We developed an e cient heuristic to solve the problem. The heuristic decomposes the multi-product problem into easily solvable single-product problems. We tested the heuristic with a large number of test instances. The heuristic can be adopted to solve the target assignment problem. We demonstrated it with some numerical examples.