DocumentCode
2972558
Title
Impact of initial wealth on newsvendor problem with S-shaped utility
Author
Geng, Wei ; Zhao, Xiaobo
Author_Institution
Dept. of Ind. Eng., Tsinghua Univ., Beijing, China
fYear
2009
fDate
8-11 Dec. 2009
Firstpage
349
Lastpage
353
Abstract
The bounded rationality of human behaviors in decision making can be characterized by an S-shaped utility function. We discuss a newsvendor problem with an S-shaped utility. It is shown that the expected utility of the final wealth is unimodal, based on which an optimal policy can be obtained. The impact of initial wealth is investigated and some structural properties of the optimal policy are given. Numerical examples illustrate the results.
Keywords
consumer behaviour; decision making; operations research; profitability; supply and demand; decision making; human behaviors bounded rationality; initial wealth; newsvendor problem; optimal policy; s-shaped utility function; Costs; Decision making; Displays; Exponential distribution; Humans; Industrial engineering; Inventory management; Random variables; Stochastic processes; Utility theory; S-shaped utility; initial wealth; newsvendor;
fLanguage
English
Publisher
ieee
Conference_Titel
Industrial Engineering and Engineering Management, 2009. IEEM 2009. IEEE International Conference on
Conference_Location
Hong Kong
Print_ISBN
978-1-4244-4869-2
Electronic_ISBN
978-1-4244-4870-8
Type
conf
DOI
10.1109/IEEM.2009.5373339
Filename
5373339
Link To Document