Abstract
This article develops a new index "Achievable Capacity Index," IA, which can accurately measure the profitability of newsboy-type product with normally distributed demand. An unbiased and effective estimator of IA is derived to estimate actual IA as the parameters of distribution are unknown. Practically, the market information regarding demand is obtained from multiple samples rather than single sample. Therefore, we estimate and test IA based on multiple samples. A hypothesis testing for examining whether the profitability meets designated requirement is presented. Critical values of the test are calculated to determine the evaluation results. Finally, a real case on the sales of donuts is presented to illustrate the applicability of our approach.
Original language | English |
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Pages (from-to) | 2701-2719 |
Number of pages | 19 |
Journal | Communications in Statistics - Theory and Methods |
Volume | 42 |
Issue number | 18 |
DOIs | |
State | Published - 17 Sep 2013 |
Keywords
- Achievable capacity index
- Estimating and testing
- Multiple samples
- Newsboy
- Normal demand