Optimal Ordering Policy of a Risk-Averse Retailer Subject to Inventory Inaccuracy

Risk Averse Inventory Management∗

Traditional inventory models focus on risk neutral decision makers, i.e., characterizing replenishment strategies that maximize expected total profit, or equivalently, minimize expected total cost over a planning horizon. In this paper, we propose a general framework for incorporating risk aversion in multi-period inventory models as well as multi-period models that coordinate inventory and pri...

Joint Ordering and Inspection Policy for a Multi-period Inventory System Subject to Shrinkage Errors

One of the implicit assumptions considered in the majority of investigations performed in the area of inventory management is that the physical flow of products that passes through an inventory system as well as the associated information flow are free from defects, i.e. for a given type of product, the quantity received matches exactly the quantity ordered or there are no errors occurring duri...

An optimal inventory pricing and ordering strategy subject to demand dependent on stock level and price

This article considers the deterministic singular optimal control problem of profit maximisation for inventory replenished at a variable rate and depleted by demand which is assumed to vary with price and stock availability. Optimal policies for the product order rate and price are derived using the maximum principle. Several initial inventory regions are identified as potential inventory state...

Stackelberg Game of Buyback Policy in Supply Chain with a Risk-Averse Retailer and a Risk-Averse Supplier Based on CVaR

This paper considers a decentralized supply chain in which a single supplier sells a perishable product to a single retailer facing uncertain demand. We assume that the supplier and the retailer are both risk averse and utilize Conditional Value at Risk (CVaR), a risk measure method which is popularized in financial risk management, to estimate their risk attitude. We establish a buyback policy...

Optimal Inventory Policy