Research On Loss-averse Newsvendor Probler With Random Shortage Cost And Random Capacity

Loss averse emotion is a basic and core concept in prospect theory.Loss averse emotion can affect the decision of the decision-maker,but few studies consider decision-makers' loss averse.Therefore,study about decision-makers' loss averse in newsvendor problem has important theoretical value;and meanwhile,considering loss averse in newsvendor problem will be more realistic.The traditional newsvendor problem mainly assume that shortage cost and capacity the retailer may face are stable,what's more,the supplier can satisfy the order under any condition,in other words,the capacity of the supplier is unlimited.But,in practice,the retailer usually confronts random shortage cost and random capacity,which affect the decision of the retailer a lot.In conclusion,adding the consideration of the random shortage cost and random capacity to the newsvendor problem is an important supplement for the newsvendor problem.It is more important that the new model can meet the decision makers' demand for the practical decision.This paper first analyses and summarizes the loss averse newsvendor problem.This paper studies the newsvendor problem considering the decision-makers' loss averse,random shortage cost and random capacity.The purpose and significance of the research are as follows:in the theory and method research aspect,it enriches the studies of the newsvendor problem considering decision-makers' behavior and proposes new results for the behavioral operations management;in the practical research aspect,the paper proposes a specific example,and also provides guidance for the model application in practice.This paper completes the following aspects:(1)Develop a loss averse newsvendor model considering random shortage cost,and gave the specific solution.This paper considers a newsvendor facing an ordering problem under stochastic demand.With the application of loss averse this paper develops a model considering decision-makers'loss averse and random shortage cost,also analyses the affection that loss averse emotion has on decisions.At this part,we solve the problem by defining the distribution of the shortage cost as a random variable,then we can construct a double integral.Besides,this paper uses the model to solve a practical example,which verified the impact of loss averse on decisions.(2)Develop a loss averse newsvendor model considering random capacity,and gave the' specific solution.This model considers a newsvendor facing an ordering problem under stochastic demand.With the application of loss-averse,this model considers decision-makers' loss averse and random capacity.Under this circumstance,the shortage depends on the order quantity,the market demand and the supplier's capacity.The revenue function is a double integral on loss-averse behavior and random capacity.By solving the model,the paper analyze the influence of the loss-averse behavior to the newsvendor,besides,this paper uses the model to solve a practical example,which verified the impact of loss averse on decisions.(3)Develop a loss averse newsvendor model considering random shortage cost and random capacity,and gave the specific solution.At this part,the construction of the model is based on the combination of part(1)and part(2),which make the decision made by the retailer more comprehensive and more realistic.Under this circumstance,the shortage depends on the order quantity,the market demand,random shortage cost and random capacity.By combining the four factors,this paper get the model of the newsvendor problem in which the newsvendor has loss-aversion emotion and faces random shortage cost and random capacity.This paper specifies the loss-aver emotion's affection on the newsvendor and give the concrete calculation examples to testify the influence of the loss-aversion emotion and random shortage cost and random capacity on the newsvendor.Finally,this paper summarized the main findings and conclusions,limitations of the study and the research for future study.