The (σ,S) policy for uncertain multi-product newsboy problem

•We derive an optimal (σ,S) policy for uncertain multi-product newsboy problem based on uncertainty theory.•We propose a methodology for deriving the optimal (σ,S) policy.•An example is given to illustrate how to use the (σ,S) policy under uncertain situation. This paper derives an optimal (σ,S) policy for uncertain multi-product newsboy problem. Demands for the products are estimated by experts and assumed to be independent uncertain variables. Uncertainty theory, which is a new mathematical tool to deal with human uncertainty, is employed to model demand distributions. A fixed setup cost and a linear ordering cost are incurred if products are ordered. Setup cost is variant and depends on whether a joint order or an individual order is placed. A methodology is proposed for determining the optimal (σ,S) policy. Finally, a two-product example is provided to show how to design an optimal (σ,S) policy in realistic situation.