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4303. On the Impact of Risk-Attitude when Dealing with Stockouts
Invited abstract in session WC-61: Retail Inventory Management III, stream Retail Operations.
Wednesday, 12:30-14:00Room: S10 (building: 101)
Authors (first author is the speaker)
| 1. | Sila Cetinkaya
|
| Southern Methodist University |
Abstract
We examine alternative approaches for dealing with excess demand through the lens of a retailer whose risk-attitude is modeled explicitly. With representative risk-neutral and risk-averse newsvendor models, we pursue a comparison between two basic stockout policies (lost-sales versus backorders) in terms of financial metrics as well as metrics that relate to inventory availability. Depending on the risk attitude and particular cost parameter relationships, we explore settings that reveal the superior way for handling stockout scenarios. We discover analytical takeaways that hold in general and report numerical findings that reveal resiliency of the superior stockout policy.
Keywords
- Inventory
- Supply Chain Management
- Stochastic Models
Status: accepted
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