Risk averse selective newsvendor problems
type: Item
instance of: scholarly article
title: Risk averse selective newsvendor problems
zbMATH Open document ID: 1144.90430
DOI: 10.1504/IJOR.2008.019733
author: Kiran Chahar
author: Deepak Tirumalasetty
author: Kevin M. Taaffe
published in: International Journal of Operational Research
publication date: 2008-10-02T00:00:00Z
review text: Summary: Consider a firm that offers a product during a single selling season. The firm has the flexibility of choosing which demand sources to serve, but these decisions must be made prior to knowing the actual demand that will materialise in each market. Moreover, we assume that the firm operates on a tight budget and cannot afford to record several successive financial losses spanning consecutive periods. In this case, it is likely that their objective is not only to maximise expected profit, but also to minimise the variance from that goal. We provide insights into the tradeoff between expected profit and demand uncertainty using a mean variance approach. We also present a solution approach, via simulation, to determine a market set (and total order quantity) when the firm's objective is to minimise the probability of receiving a profit below a critical threshold value.
Mathematics Subject Classification ID: 90B60
Mathematics Subject Classification ID: 91B42
zbMATH DE Number: 5348785
zbMATH Keywords: demand selection
zbMATH Keywords: demand uncertainty
zbMATH Keywords: heuristic
zbMATH Keywords: mean variance analysis
zbMATH Keywords: newsvendor problems
zbMATH Keywords: order quantity
zbMATH Keywords: risk aversion
zbMATH Keywords: simulation
MaRDI profile type: Publication
full work available at URL: ijor.2008.019733
OpenAlex ID: W2067820167
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description: scientific article; zbMATH DE number 5348785