Sourcing with random yields and stochastic demand: A newsvendor approach
Computers and Operations Research
Stochastic Comparisons in Airline Revenue Management
Manufacturing & Service Operations Management
Effect of Supply Reliability in a Retail Setting with Joint Marketing and Inventory Decisions
Manufacturing & Service Operations Management
The Effect of Lead Time and Demand Uncertainties in (r, q) Inventory Systems
Operations Research
Media Revenue Management with Audience Uncertainty: Balancing Upfront and Spot Market Sales
Manufacturing & Service Operations Management
Regret in Overbooking and Fare-Class Allocation for Single Leg
Manufacturing & Service Operations Management
On the structural properties of a discrete-time single product revenue management problem
Operations Research Letters
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Manufacturing firms routinely commit resources to increase yield rates through product- and process-improvement initiatives. Champions of such yield-improvement projects may assume that stochastically larger yield rates are beneficial. In this note, we show that this need not hold, even when the contingent production lot sizes are chosen optimally. We employ stochastic comparison techniques to show that a yield rate that is smaller in the convex order ensures higher expected profit, and we provide a distribution-free bound on the size of increase in expected profit. We also identify properties of yield-rate distributions that do make stochastically larger yield rates beneficial.