Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/70994
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dc.contributorDepartment of Applied Mathematicsen_US
dc.contributorDepartment of Logistics and Maritime Studiesen_US
dc.creatorXu, XSen_US
dc.creatorYan, Hen_US
dc.creatorChan, CKen_US
dc.date.accessioned2017-12-28T06:18:42Z-
dc.date.available2017-12-28T06:18:42Z-
dc.identifier.issn1026-0226en_US
dc.identifier.urihttp://hdl.handle.net/10397/70994-
dc.language.isoenen_US
dc.publisherHindawi Publishing Corporationen_US
dc.rightsCopyright © 2017 Xinsheng Xu et al.This is an open access article distributed under the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.en_US
dc.rightsThe following publication Xinsheng Xu, Hong Yan, Chi Kin Chan, "Opportunity Loss Minimization and Newsvendor Behavior", Discrete Dynamics in Nature and Society, vol. 2017, Article ID 3481869, 11 pages, 2017 is available at https://doi.org/10.1155/2017/3481869.en_US
dc.titleOpportunity loss minimization and newsvendor behavioren_US
dc.typeJournal/Magazine Articleen_US
dc.identifier.volume2017en_US
dc.identifier.doi10.1155/2017/3481869en_US
dcterms.abstractTo study the decision bias in newsvendor behavior, this paper introduces an opportunity loss minimization criterion into the newsvendor model with backordering. We apply the Conditional Value-at-Risk (CVaR) measure to hedge against the potential risks from newsvendor's order decision. We obtain the optimal order quantities for a newsvendor to minimize the expected opportunity loss and CVaR of opportunity loss. It is proven that the newsvendor's optimal order quantity is related to the density function of market demand when the newsvendor exhibits risk-averse preference, which is inconsistent with the results in Schweitzer and Cachon (2000). The numerical example shows that the optimal order quantity that minimizes CVaR of opportunity loss is bigger than expected profit maximization (EPM) order quantity for high-profit products and smaller than EPM order quantity for low-profit products, which is different from the experimental results in Schweitzer and Cachon (2000). A sensitivity analysis of changing the operation parameters of the two optimal order quantities is discussed. Our results confirm that high return implies high risk, while low risk comes with low return. Based on the results, some managerial insights are suggested for the risk management of the newsvendor model with backordering.en_US
dcterms.accessRightsopen accessen_US
dcterms.bibliographicCitationDiscrete dynamics in nature and society, 2017, v. 2017, 3481869en_US
dcterms.isPartOfDiscrete dynamics in nature and societyen_US
dcterms.issued2017-
dc.identifier.isiWOS:000398968000001-
dc.identifier.ros2016002945-
dc.identifier.eissn1607-887Xen_US
dc.identifier.artn3481869en_US
dc.identifier.rosgroupid2016002883-
dc.description.ros2016-2017 > Academic research: refereed > Publication in refereed journalen_US
dc.description.validatebcrcen_US
dc.description.oaVersion of Recorden_US
dc.identifier.FolderNumberLMS-0550-
dc.description.fundingSourceOthersen_US
dc.description.fundingTextHong Kong Polytechnic University; the China Postdoctoral Science Foundation; the Science Foundation of Binzhou Universityen_US
dc.description.pubStatusPublisheden_US
dc.identifier.OPUS6744321-
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