Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
480907 | European Journal of Operational Research | 2009 | 10 Pages |
Abstract
We model a risk-averse newsvendor’s decision-making behavior with some commonly used classes of utility functions within the expected utility theory (EUT) framework. Under fairly general conditions of EUT, we show that a risk-averse newsvendor will order less than an arbitrarily small quantity as selling price gets larger if price is higher than a threshold value, i.e., the optimal order quantity decreases as the selling price increases.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Charles X. Wang, Scott Webster, Nallan C. Suresh,