Newsvendor Model with Re-Distributed Profits

In this paper, we study the newsvendor model with profit re-distribution. It is different from classical model that sale process is distinguished normal sale and promotion stages. Vendor can select to sales promotion for increasing their return when real demand is lacking. We get two mathematical expressions of traditional optimization order quantity q* and new optimization market size N*. At the some degree, we also discuss the effect of (q*,N*) as some parameter changes.