A contest among distributors over who is a better newsvendor (Q840634)

Summary: This paper is concerned with the ex-post evaluation and rewarding of vendors who manage inventories of items to be sold at different retailers for their relative performance in forecasting demand. The specific scenario considered has to do with a wholesaler deploying distributors each of whom manages the inventories of products at different stores (VMI) that have a revenue-sharing arrangement with the dairy. A distributor visits each of his stores periodically, removes the expired items and stocks the shelf with quantities of his choice. In this sense, a good distributor has few overages and few underages.