Fresh produce price-setting newsvendor with bidirectional option contracts

<p style='text-indent:20px;'>This paper examines a newsvendor problem for fresh produce with bidirectional option contracts, in which the stochastic demand is price-dependent. The option, may be exercised as either call or put provides flexibility to increase decrease initial order after real realized, respectively. condition of deteriorate during circulation. optimal and pricing decisions are analytically derived circulation loss. Comparative statics analysis show that total quantity retail price but exercise price. In addition, numerical examples first decreases then increases firm maximum profit loss Furthermore, values contracts more significant when uncertainty become volatile.</p>