Research on Loss-averse Newsboy Problem Based on Uncertain Capacity

DOI

10.2991/icitme-18.2018.45How to use a DOI?

Keywords

random capacity; loss aversion; uniform distribution; newsboy model

Abstract

In the past, the research on the newsboy issue was mainly based on the basic assumption that the market demand was uncertain, while ignoring the possible impact of uncertain supplier capacity. In this paper, a loss-averse newsboy model considering the cost of out-of-stock punishment and uncertainty of supplier's capacity is constructed for this problem. Based on the assumption that stochastic demand is evenly distributed, the optimal ordering strategy for loss-averse retailers with uncertain production capacity is studied. The research in this paper shows that the optimal order quantity of the retailer is positively correlated with the residual value of the commodity unit and negatively correlated with the loss aversion coefficient. In addition, it has been found that, under certain conditions, the optimal order quantity may increase or decrease with the increase in the ordering cost, sales price, or out-of-stock penalty cost of the product.

Copyright

© 2018, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Kangkang Ge
PY  - 2018/08
DA  - 2018/08
TI  - Research on Loss-averse Newsboy Problem Based on Uncertain Capacity
BT  - Proceedings of the 2018 International Conference on Information Technology and Management Engineering (ICITME 2018)
PB  - Atlantis Press
SP  - 222
EP  - 225
SN  - 1951-6851
UR  - https://doi.org/10.2991/icitme-18.2018.45
DO  - 10.2991/icitme-18.2018.45
ID  - Ge2018/08
ER  -