This paper studies the optimal option purchase of a loss-averse retailer under emergent replenishment. It is assumed that all or part excess demands in stock-out situation can be replenished, and retailer's quantity investigated. found should not options only needs to replenish inventory certain conditions. When maximizing expected utility without shortage cost, decreasing loss aversion coefficient. To maximise with larger cost implies bigger quantity. If exists, there will on profit for who...

AbstractTo manage the risk arising from uncertainty in market demand, this paper introduces Conditional Value-at-Risk (CVaR) measure into decision framework of newsvendor who aims to minimise his opportunity loss. It is found under CVaR that newsvendor's optimal order quantity increasing confidence level when understock loss bigger than overstock This implies an over-ordering may be even more caused by aversion about seeking behaviour. Under quantity, it proved expected profit and are...

With the development of information technology, big data analysis has been highlighted in operations and management. From this viewpoint, paper studies a buyer's optimal purchasing decisions combined procurement. For procurement, buyer first signs long-term contract with supplier to guarantee certain level commodity supply, can then replenish commodities from spot market if necessary. The quantity is examined maximise expected profit In view imperfectness market, trading liquidity considered...

AbstractThis paper introduces a coordination model that copes with the conflicts between supplier and retailer in two-stage supply chain. In this model, aims to maximise his/her profit, while expected profit under stochastic demand. To solve an -coordination solution is introduced, which implies both will make same concession their profits cooperate each other. Further, we show feasible for sufficiently large value , -optimum gives minimum retailer. Besides, it proved can be obtained by...

This paper investigates a purchaser's optimal procurement strategy under emergencies. The occurrence of emergencies often leads to sharp fluctuations in prices and weakens supply stability, which increases risks for purchasers. In this study, we use the option contract actively respond market reduce caused by If there is insufficient inventory due emergencies, part or all shortages can be met an emergency replenishment. Then, conduct in-depth research on purchasers results show that, higher...

In this article, a novel objective penalty function as well its second-order smoothing is introduced for constrained optimization problems (COP). It shown that an optimal solution to the problem original under some mild conditions. Based on function, algorithm has better convergence introduced. Numerical examples illustrate efficient in solving COP.

We introduce loss aversion into the decision framework of newsvendor model. By introducing coefficient<mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" id="M1"><mml:mrow><mml:mi>λ</mml:mi></mml:mrow></mml:math>, we propose a novel utility function for loss-averse newsvendor. First, obtain optimal order quantity to maximize expected who is risk-neutral. It found that this smaller than profit maximization in classical model, which may help explain bias Then, reduce risk originates from...

To hedge against potential risks, this paper introduces the conditional value-at-risk (CVaR) measure into option purchasing for risk-averse retailer with shortage cost. We introduce two models to select optimal purchase quantity. It is found that both quantities can be decreasing in retail price and increasing executing under certain conditions. This different from quantity a risk-neutral maximize expected profit. may or confidence level, which implies who becomes more fewer options risks....

As global public health events and regional conflicts have greater influence on supply chains nowadays, supplier default in procurement becomes more common practice. However, there is less research portfolio purchasing decisions the case of fixed-term contract default. This paper focuses optimal decision buyers by using a combination contracts spot transactions, which beneficial extension classical newsvendor model. When not considered, purchase quantity first obtained, maximizes buyer’s...

In this paper, we introduce a cooperation model (CM) for the two-stage supply chain consisting of manufacturer and retailer. model, it is supposed that objective to maximise his/her profit while retailer minimise CVaR controlling risk originating from fluctuation in market demand. reality, would like choose their own decisions as wholesale price order quantity optimise objectives, resulting fact expected decision may conflict with each other. Then, achieve cooperation, both need give some...

This article introduces a smoothing technique to the l1 exact penalty function. An application of yields twice continuously differentiable function and smoothed problem. Under some mild conditions, optimal solution problem becomes an approximate original constrained optimization Based on problem, we propose algorithm solve Every limit point sequence generated by is solution. Several numerical examples are presented illustrate performance proposed algorithm.

This paper characterizes the retailer’s loss aversion by introducing a coefficient and proposes new utility function for retailer. To hedge against risk arising from uncertain market demand, we use Conditional Value-at-Risk (CVaR) measure to quantify potential risks obtain optimal order quantity retailer maximize CVaR objective of utility. It is shown that expected smaller than profit maximizing (EPM) in classical newsvendor model, which can help explain decision bias model. study shows with...

This paper studies the optimal order decisions for loss-averse newsvendor problem with backordering and contributes to risk hedging issue in model. The Conditional Value-at-Risk (CVaR) measure is applied quantify potential risks a setting, we obtain quantity maximize CVaR of utility. It found that objective could be bigger or smaller than expected profit maximization (EPM) quantity, which provides an alternative explanation on decision bias study also reveals utility EPM implies encourages...

Risk-averse suppliers’ optimal pricing strategies in two-stage supply chains under competitive environment are discussed. The suppliers this paper focus more on losses as compared to profits, and they care their long-term relationship with customers. We introduce for the a loss function, which covers both current future loss. wholesale price is solved situations of risk neutral, averse, combination minimizing controlling risk, respectively. Besides, some properties relations among these...

Abstract High Temperature Gas-cooled Reactor (HTGR) is recognized by the international nuclear power industry as a safe type of reactor. The modular pebble-bed high temperature gas-cooled reactor uses modules with relatively small thermal between 200–600MWt, utilizing high-temperature resistance that can be achieved coated fuel particles. Institute Nuclear and New Energy Technology (INET) Tsinghua University has developed commercial-scale 200 MWe Pebble-bed Module project (HTR-PM). decay...