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Article

Obtaining Conservative Estimates of Integrated Profitability for a Single-Period Product in an Own-Branding-and-Manufacturing Enterprise with Multiple Owned Channels

by
Rung-Hung Su
,
Chia-Ding Hou
* and
Jou-Yu Lee
Department of Statistics and Information Science, Fu Jen Catholic University, New Taipei City 242062, Taiwan
*
Author to whom correspondence should be addressed.
Mathematics 2024, 12(13), 2080; https://doi.org/10.3390/math12132080
Submission received: 20 May 2024 / Revised: 29 June 2024 / Accepted: 1 July 2024 / Published: 2 July 2024
(This article belongs to the Special Issue Applied Statistics in Management Sciences)

Abstract

The achievable capacity index (ACI) is a simple and efficient approach for estimating the profitability of newsboy-type products, wherein profitability is defined as the probability of achieving the target profit by optimizing the order quantity. At present, the ACI is applicable to single retail stores (i.e., single demand) but not to multiple sales channels (i.e., multiple demand). This paper presents an integrated achievable capacity index (IACI) by which to measure the aggregate profitability of multiple mutually independent channels under normally distributed demand. An unbiased IACI estimator is also developed, to which is applied the Taylor expansion to approximate its sampling distribution, wherein the sizes, means, and variances of demand differ in each channel. Furthermore, overestimates due to sampling error are avoided by deriving the lower confidence bound for the IACI. This paper also provides generic tables to aid managers seeking conservative estimates of profitability. The applicability of the proposed scheme is demonstrated numerically using a real-world example involving an own-branding-and-manufacturing (OBM) enterprise with multiple owned channels.
Keywords: inventory; achievable capacity index; OBM; conservative profitability inventory; achievable capacity index; OBM; conservative profitability

Share and Cite

MDPI and ACS Style

Su, R.-H.; Hou, C.-D.; Lee, J.-Y. Obtaining Conservative Estimates of Integrated Profitability for a Single-Period Product in an Own-Branding-and-Manufacturing Enterprise with Multiple Owned Channels. Mathematics 2024, 12, 2080. https://doi.org/10.3390/math12132080

AMA Style

Su R-H, Hou C-D, Lee J-Y. Obtaining Conservative Estimates of Integrated Profitability for a Single-Period Product in an Own-Branding-and-Manufacturing Enterprise with Multiple Owned Channels. Mathematics. 2024; 12(13):2080. https://doi.org/10.3390/math12132080

Chicago/Turabian Style

Su, Rung-Hung, Chia-Ding Hou, and Jou-Yu Lee. 2024. "Obtaining Conservative Estimates of Integrated Profitability for a Single-Period Product in an Own-Branding-and-Manufacturing Enterprise with Multiple Owned Channels" Mathematics 12, no. 13: 2080. https://doi.org/10.3390/math12132080

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