Article ID Journal Published Year Pages File Type
1033260 Omega 2009 7 Pages PDF
Abstract

We study the risk-averse newsvendor model with a mean–variance objective function. We show that stockout cost has a significant impact on the newsvendor's optimal ordering decisions. In particular, with stockout cost, the risk-averse newsvendor does not necessarily order less than the risk-neutral newsvendor. We illustrate this finding analytically for the case where the demand follows the power distribution.

Related Topics
Social Sciences and Humanities Business, Management and Accounting Strategy and Management
Authors
, , , ,