5. Conclusion
In this study, we consider a newsvendor that sells a single product over a single selling season in order to simultaneously decide the selling price and stock quantity to maximize the expected profit. The customers are strategic and forward thinking, in that they recognize that the product may become available on the salvage market and may consider postponing their purchase to obtain the salvage price to maximize their expected surplus. We consider two price-sensitive demand cases: additive and multiplicative. We derive the newsvendor's optimal decisions about the price and stock for both cases, and demonstrate that under the newsvendor's optimal decisions, all strategic consumers buy the product immediately. In addition, we prove that neglecting the price-sensitivity of demand leads the newsvendor to make suboptimal decisions. Finally, we show that under certain conditions, strategic consumer behavior may positively affect the newsvendor's optimal expected profit in the additive demand case.
