Inventory management is an important task in business operations.
The classical newsboy problem deals with the purchasing
inventory problem for single-period products, such as perishable
or seasonal goods. For such problems, a business manager should
determine product order quantity at the beginning of each period.
Products cannot be sold (or the price is trivial) in the next period if
the order quantity exceeds actual demand; however, there is an
opportunity cost of lost profit in the reverse situation. Therefore,
the determination of the order quantity is critical in the classical
newsboy problem.