A Comparative Study Of Two Ordering Models Based On CVaR

With the rapid development of market economy,Not only the commodities’ type,style,function which present are becoming more and more diversified,but also the constantly changing consumer demand.So retailers who are operating perishable goods are facing increasing market risk.What they need to do not only through the promotion to stimulate the potential market demand,but also must optimize the inventory to reduce operational risk.Taking the CVaR risk measurement criterion,this paper studies a newsvendor model in which a risk-averse retailer has two order opportunity and exerts sales effort to enhance commodity demand.Two theoretical models are discussed,one of the models is once-ordering model and the other is twice-ordering model.Furthermore,it compares differences of the retailer decisions in the two models,As well as the impact of retailers risk aversion attitude on operational decisions.To take the risk aversion characteristics of retail enterprises as the research object.The CVaR model is established on the basis of the relationship between the commodity demand and the promotion investment are addition and multiplication.Firstly,Given the profit function of the retail enterprises.Through the establishment of retail enterprises CVaR model.The optimal order quantity and the optimal sales effort decision of the retail enterprise under the two order modes have inferred.And the relationship between the optimal decision variables and the parameters in the model.In particular,the more risk averse the retailer is,the less he orders,whether or not second order is possible.And no matter what kind of demand distribution exists.Secondly,we compare the optimal decisions’ differences between the two order moders of retail enterprises.Finally,an example analysis of market demand and negative exponential distribution under the uniform distribution on the relevant conclusions are verified.Some managerial insights are obtained from discussion.