We study the effects of demand uncertainty on optimal decisions and the expected profit of a price-setting newsvendor who faces either additive or multiplicative stochastic demand. Our key findings are as follows. (1) A stochastically larger demand may even lead to a smaller order size and a...

We study a continuous-review, two-echelon inventory system with one central warehouse, multiple local facilities, and each facility facing random demand. Local facilities replenish their stock from the central warehouse (or distribution center), which in turn places orders at an outside supplier...