Sourcing with Demand Updates

We study a two-stage newsvendor model where the initially uncertain mean demand is revealed midstream, allowing for a second, costlier order to be placed. The two-stage process is relevant to many retailers who have access to two supply options: a long-lead, low-cost option where orders need to be placed under much demand uncertainty, and a short-lead, high-cost option after a signal is revealed that updates the mean demand. We introduce a forecast evolution model that describes how the initial