The expectation-based loss-averse newsvendor under supply uncertainty

摘要

We extend the expectation-based loss-averse newsvendor model according [1] by assuming that decision maker confronts deterministic demand and uncertain supply at the beginning of a selling season. We show with numerical study that the higher the penalty coefficient, the lower the optimal order quantity. Higher retail price and salvage value lead to optimally order more. However, when the wholesale price increases, the optimal order quantity decreases.