Geodesic
Inventory control and pricing for regret-averse newsvendor
Cao, Bing-Bing1 ; Fan, Zhi-Ping1, 2  ; Li, Hongyan3  ; You, Tian-Hui1
1 Department of Information Management and Decision Sciences, School of Business Administration, Northeastern University, Shenyang 110167, China.
2 State Key Laboratory of Synthetical Automation for Process Industries, Northeastern University, Shenyang 110819, China.
3 Department of Economics and Business Economics, School of Business and Social Sciences, Aarhus University, 8210 Aarhus, Denmark.
RAIRO - Operations Research - Recherche Opérationnelle, Tome 51 (2017) no. 4, pp. 1033-1054

Voir la notice de l'article provenant de la source Numdam

The decision maker’s perception of regret affects a company’s inventory control and pricing decisions. In this paper, we investigate how regret aversion behaviors affect the inventory control and pricing decisions under a newsvendor setting. To capture the regret aversion behaviors of the newsvendor, we provide a regret aversion utility function. Based on the built regret aversion utility function and the classic inventory control and pricing model, we construct utility function by integrating the profit utility and the regret aversion utility, and then analyze the conditions of optimal solution on the inventory and pricing policy under additive and multiplicative demand in details. Further, by the analysis of properties and numerical study, we show that the optimal policy for regret-averse newsvendor deviates from the one for regret-neutral newsvendor and changes with the regret aversion parameters to varying degree. We also show the impact tendency of newsvendor’s regret aversion behaviors on the optimal inventory and pricing policy under the additive and multiplicative demand.

Reçu le :
Accepté le :
DOI : 10.1051/ro/2017005
Classification : 90C90
Keywords: Inventory control, pricing, regret aversion, behavioral operations management

Cao, Bing-Bing 1 ; Fan, Zhi-Ping 1, 2 ; Li, Hongyan 3 ; You, Tian-Hui 1

1 Department of Information Management and Decision Sciences, School of Business Administration, Northeastern University, Shenyang 110167, China.
2 State Key Laboratory of Synthetical Automation for Process Industries, Northeastern University, Shenyang 110819, China.
3 Department of Economics and Business Economics, School of Business and Social Sciences, Aarhus University, 8210 Aarhus, Denmark. 
@article{RO_2017__51_4_1033_0,
     author = {Cao, Bing-Bing and Fan, Zhi-Ping and Li, Hongyan and You, Tian-Hui},
     title = {Inventory control and pricing for regret-averse newsvendor},
     journal = {RAIRO - Operations Research - Recherche Op\'erationnelle},
     pages = {1033--1054},
     publisher = {EDP-Sciences},
     volume = {51},
     number = {4},
     year = {2017},
     doi = {10.1051/ro/2017005},
     mrnumber = {3783933},
     zbl = {1393.90142},
     language = {en},
     url = {http://geodesic.mathdoc.fr/articles/10.1051/ro/2017005/}
}
TY  - JOUR
AU  - Cao, Bing-Bing
AU  - Fan, Zhi-Ping
AU  - Li, Hongyan
AU  - You, Tian-Hui
TI  - Inventory control and pricing for regret-averse newsvendor
JO  - RAIRO - Operations Research - Recherche Opérationnelle
PY  - 2017
SP  - 1033
EP  - 1054
VL  - 51
IS  - 4
PB  - EDP-Sciences
UR  - http://geodesic.mathdoc.fr/articles/10.1051/ro/2017005/
DO  - 10.1051/ro/2017005
LA  - en
ID  - RO_2017__51_4_1033_0
ER  - 
%0 Journal Article
%A Cao, Bing-Bing
%A Fan, Zhi-Ping
%A Li, Hongyan
%A You, Tian-Hui
%T Inventory control and pricing for regret-averse newsvendor
%J RAIRO - Operations Research - Recherche Opérationnelle
%D 2017
%P 1033-1054
%V 51
%N 4
%I EDP-Sciences
%U http://geodesic.mathdoc.fr/articles/10.1051/ro/2017005/
%R 10.1051/ro/2017005
%G en
%F RO_2017__51_4_1033_0
Cao, Bing-Bing; Fan, Zhi-Ping; Li, Hongyan; You, Tian-Hui. Inventory control and pricing for regret-averse newsvendor. RAIRO - Operations Research - Recherche Opérationnelle, Tome 51 (2017) no. 4, pp. 1033-1054. doi: 10.1051/ro/2017005

Cité par Sources :