A note on newsvendor problem with pricing

The main purpose of the paper is to present a specific case of dynamic pricing for the newsvendor problem. Firstly, the short overview of a newsvendor problem is given together with references to the selected literature and remarks to its applicability. Then, the dynamic pricing principles are discussed together with references to decision dependent randomness case in stochastic programming. The dynamic pricing problem deals with the determination of selling prices over time for a product whose demand is random and whose supply is fixed. We approach this problem by formulating the newsvendor problem, which is introduced as a single period problem in our case. We focus on the specific features of the demand function assuming decision dependent uniform distribution. We assume that its support size linearly decreases with the increase of the price. Under such assumptions, the model has suitable computational features related to the expectation of the objective function. In addition, possibility to increase the profit by the change of the price may appear. The model formulation allows us to use the MAPLE software for symbolic computations and vizualisation of results. The test results for the selected data set are visualised at the end of the paper.