demand estimation

Evaluating alternative frequentist inferential approaches for optimal order quantities in the newsvendor model under exponential demand. MPRA Paper. 39650, University Library of Munich, Germany.

Three estimation policies for the optimal order quantity of the classical newsvendor model under exponential demand are evaluated in the current paper. According to the principle of the first estimation policy, the corresponding estimator is obtained replacing in the theoretical formula which gives the optimal order quantity the parameter of exponential distribution with its maximum likelihood estimator. The estimator of the second estimation policy is derived in such a way as to ensure that the requested critical fractile is attained.