A risk-averse newsvendor model with limited capacity and outsourcing under the CVaR criterion

The optimal inventory control is closely related to an enterprise’s operational efficiency, survival, and development. Market price uncertainty is introduced into the newsvendor model and the uncertainty’s impact on the firm's optimal stocking quantity is discussed. The results show that the impact of stochastic market price on the optimal stocking quantity under a given condition mainly depends on the magnitude of inventory cost. When the inventory cost is low, the market price’s uncertainty leads the firm to increase the stocking quantity. In contrast, when the inventory cost is high, market price uncertainty leads the firm to decrease inventory. Besides, the risk-averse behaviour leads the firm to reduce its stocking quantity.

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A Risk-Averse Newsvendor Model Under the Framework of Uncertainty Theory

IEEE Access ◽

10.1109/access.2019.2960348 ◽

2019 ◽

Vol 7 ◽

pp. 182632-182642

Author(s):

Shengzhong Zhang ◽

Yingmin Yu ◽

Jidong Li ◽

Qihong Zhu

Keyword(s):

Uncertainty Theory ◽

Risk Averse ◽

Newsvendor Model

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Life after Heart Transplantation

European Psychologist ◽

10.1027//1016-9040.7.4.285 ◽

2002 ◽

Vol 7 (4) ◽

pp. 285-294 ◽

Cited By ~ 2

Author(s):

Lucia Savadori ◽

Lorella Lotto ◽

Rino Rumiati

Keyword(s):

Heart Transplantation ◽

Frame Of Reference ◽

Physician Communication ◽

Risk Averse ◽

Medical Team ◽

Perceived Knowledge ◽

Surgical Technology ◽

Postoperative Therapy ◽

Life Expectation ◽

Risk Judgments

Progress in surgical technology and in postoperative therapy has remarkably increased life expectation after heart transplantation. Nevertheless, patients still show a resistance to resume a normal life after transplantation, for example, to return to work. In this study we assume that after surgery patients become risk averse because they achieve a positive frame of reference. Because of this propensity toward risk aversion, they withhold from engaging in behavior that their physical condition would allow them in principle. Coherent with this assumption we found that compared to the medical team patients overestimate the degree of risk for routine activities. The study also showed that the representation of risk by the patients could be captured by a dreadfulness factor and a voluntariness factor. Patients' risk judgments were strongly and specifically predicted by the perceived degree of dreadfulness of the activity and, to a lesser extent, by the perceived knowledge of the consequences. Implications for patient-physician communication were explored.

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