Where Did the Demand Go? Teaching Demand Censoring with the Newsvendor Challenge

The newsvendor model is widely used to teach decision making under uncertainty. Traditionally, analytical methods have been taught to determine the optimal order quantity that balances missed profit from ordering too few units against the cost of excess inventory from ordering too many. In practical...

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Detalles Bibliográficos
Autores: Gijsbrechts, Joren, van Staden, Heletje
Tipo de recurso: artículo
Fecha de publicación:2025
País:España
Institución:Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)
Repositorio:Recercat. Dipósit de la Recerca de Catalunya
OAI Identifier:oai:recercat.cat:20.500.14342/5902
Acceso en línea:https://hdl.handle.net/20.500.14342/5902
https://doi.org/10.1287/ited.2024.0085
Access Level:acceso abierto
Palabra clave:Feature-based newsvendor
Censored demand
Inventory control
In-class challenge
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spelling Where Did the Demand Go? Teaching Demand Censoring with the Newsvendor ChallengeGijsbrechts, Jorenvan Staden, HeletjeFeature-based newsvendorCensored demandInventory controlIn-class challengeThe newsvendor model is widely used to teach decision making under uncertainty. Traditionally, analytical methods have been taught to determine the optimal order quantity that balances missed profit from ordering too few units against the cost of excess inventory from ordering too many. In practical settings, however, organizations must estimate these costs using censored data as only sales are observable in the data, not the true demand. Neglecting demand censoring can, therefore, lead to underestimating lost sales. These concepts can be difficult to grasp in a classroom setting. Hence, we developed a fun classroom challenge to simulate the newsvendor problem with data and demand censoring. In the challenge, students are provided with hypothetical, long-term sales data and are tasked with determining the optimal number of units to order per period. The challenge extends the traditional newsvendor model by including censored data such that traditional approaches result in suboptimal decisions. The challenge also emphasizes the importance between time spent on predictions (forecasting demand) and prescriptions (order decisions). The challenge can be adapted to diverse student cohorts, and experience reveals productive class discussions as students compete to determine the best order policies.info:eu-repo/semantics/publishedVersionINFORMSUniversitat Ramon Llull. Esade2025info:eu-repo/semantics/article8 p.https://hdl.handle.net/20.500.14342/5902https://doi.org/10.1287/ited.2024.0085reponame:Recercat. Dipósit de la Recerca de Catalunyainstname:Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)InglésINFORMS Transactions on Education, Vol. 25(3)© L'autor/aAttribution 4.0 Internationalhttp://creativecommons.org/licenses/by/4.0/info:eu-repo/semantics/openAccessoai:recercat.cat:20.500.14342/59022026-05-29T05:05:01Z
dc.title.none.fl_str_mv Where Did the Demand Go? Teaching Demand Censoring with the Newsvendor Challenge
title Where Did the Demand Go? Teaching Demand Censoring with the Newsvendor Challenge
spellingShingle Where Did the Demand Go? Teaching Demand Censoring with the Newsvendor Challenge
Gijsbrechts, Joren
Feature-based newsvendor
Censored demand
Inventory control
In-class challenge
title_short Where Did the Demand Go? Teaching Demand Censoring with the Newsvendor Challenge
title_full Where Did the Demand Go? Teaching Demand Censoring with the Newsvendor Challenge
title_fullStr Where Did the Demand Go? Teaching Demand Censoring with the Newsvendor Challenge
title_full_unstemmed Where Did the Demand Go? Teaching Demand Censoring with the Newsvendor Challenge
title_sort Where Did the Demand Go? Teaching Demand Censoring with the Newsvendor Challenge
dc.creator.none.fl_str_mv Gijsbrechts, Joren
van Staden, Heletje
author Gijsbrechts, Joren
author_facet Gijsbrechts, Joren
van Staden, Heletje
author_role author
author2 van Staden, Heletje
author2_role author
dc.contributor.none.fl_str_mv Universitat Ramon Llull. Esade
dc.subject.none.fl_str_mv Feature-based newsvendor
Censored demand
Inventory control
In-class challenge
topic Feature-based newsvendor
Censored demand
Inventory control
In-class challenge
description The newsvendor model is widely used to teach decision making under uncertainty. Traditionally, analytical methods have been taught to determine the optimal order quantity that balances missed profit from ordering too few units against the cost of excess inventory from ordering too many. In practical settings, however, organizations must estimate these costs using censored data as only sales are observable in the data, not the true demand. Neglecting demand censoring can, therefore, lead to underestimating lost sales. These concepts can be difficult to grasp in a classroom setting. Hence, we developed a fun classroom challenge to simulate the newsvendor problem with data and demand censoring. In the challenge, students are provided with hypothetical, long-term sales data and are tasked with determining the optimal number of units to order per period. The challenge extends the traditional newsvendor model by including censored data such that traditional approaches result in suboptimal decisions. The challenge also emphasizes the importance between time spent on predictions (forecasting demand) and prescriptions (order decisions). The challenge can be adapted to diverse student cohorts, and experience reveals productive class discussions as students compete to determine the best order policies.
publishDate 2025
dc.date.none.fl_str_mv 2025
dc.type.none.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv https://hdl.handle.net/20.500.14342/5902
https://doi.org/10.1287/ited.2024.0085
url https://hdl.handle.net/20.500.14342/5902
https://doi.org/10.1287/ited.2024.0085
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv INFORMS Transactions on Education, Vol. 25(3)
dc.rights.none.fl_str_mv © L'autor/a
Attribution 4.0 International
http://creativecommons.org/licenses/by/4.0/
info:eu-repo/semantics/openAccess
rights_invalid_str_mv © L'autor/a
Attribution 4.0 International
http://creativecommons.org/licenses/by/4.0/
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv 8 p.
dc.publisher.none.fl_str_mv INFORMS
publisher.none.fl_str_mv INFORMS
dc.source.none.fl_str_mv reponame:Recercat. Dipósit de la Recerca de Catalunya
instname:Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)
instname_str Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)
reponame_str Recercat. Dipósit de la Recerca de Catalunya
collection Recercat. Dipósit de la Recerca de Catalunya
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15,811543

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