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Title: Mean-variance analysis of the newsvendor model with stockout cost
Authors: Wu, Jun
Li, Jian
Wang, Shouyang
Cheng, T. C. Edwin
Subjects: Supply chain
Newsvendor problem
Stockout cost
Issue Date: Jun-2009
Publisher: Elsevier Ltd.
Source: Omega, June 2009, v. 37, no. 3, p. 724-730.
Abstract: We study the risk-averse newsvendor model with a mean-variance objective function. We show that stockout cost has a significant impact on the newsvendor's optimal ordering decisions. In particular, with stockout cost, the risk-averse newsvendor does not necessarily order less than the risk-neutral newsvendor. We illustrate this finding analytically for the case where the demand follows the power distribution.
Description: Note: Pre-published version entitled: A Note on Mean-variance Analysis of the Newsvendor Model with Stockout Cost.
Rights: Omega © 2008 Elsevier Ltd. The journal web site is located at
Type: Journal/Magazine Article
DOI: 10.1016/
ISSN: 0305-0483
Appears in Collections:LMS Journal/Magazine Articles

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