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Multi-step newsvendors revisited: targeted marketing investment and informativeness
Journal article   Peer reviewed

Multi-step newsvendors revisited: targeted marketing investment and informativeness

Elia Balugani, Antonio Coruzzolo, Francesco Lolli, Yacine Rekik and Aris Syntetos
International Journal of Production Research
22/06/2026

Abstract

forecasting newsvendor dynamic programming inventory Marketing
We study a retailer of short-life products facing a season with two ordering opportunities. A planned targeted marketing campaign executed immediately before the second opportunity can reduce second-period demand variance. The retailer must decide whether to invest and how much to order in each period. We formulate the problem as a two–period newsvendor and solve it with dynamic programming. A scenario analysis shows that targeted variance reduction is effective unless the first order is substantially oversized or the campaign is very costly. We also provide a benchmark comparison (no–marketing), quantify miscommunication risks, and examine how the relative lengths of the two periods affect performance.
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