MCDM'17 - paper no. 1

 

Back to MCDM'17 contents
 

BICRITERIA OPTIMIZATION IN THE RISK-ADJUSTED NEWSVENDOR PROBLEM

Milena Bieniek

Abstract:

In this paper, we study the newsvendor problem with various degrees of risk tolerance. We consider bicriteria optimization where the first objective is the classical maximization of the expected profit and the second one is the satisficing-level objective. The results depend on the risk coefficient and are different for a risk-neutral, a risk-averse, and a risk-seeking retailer. We find the compromise solution of the bicriteria newsvendor problem numerically, since the two objectives are mutually conflicting. The formulas obtained are illustrated with exponentially distributed demand.

Keywords:

stochastic demand, newsvendor problem, bicriteria optimization, risk

Reference index:

Milena Bieniek, (2017), BICRITERIA OPTIMIZATION IN THE RISK-ADJUSTED NEWSVENDOR PROBLEM, Multiple Criteria Decision Making (12), pp. 9-21

Full text:

download

This article is licensed under a Creative Commons Atribution- NonCommercial International License .