The article summarizes extant research on context effects and choice theories in a straightforward fashion. The context effects are used as benchmarks to compare six choice theories. The context effects include similarity, attraction, compromise, and reference point effects. The considered theories include simple scalability model, random utility model, elimination by aspects model, strategy switching models, componential context model, and connectionist network model of choice. The article discusses the implications of each model for consumer behavior, and suggests that the choice of model should depend on the characteristics of products, consumers and purchase process. Key Words • attraction • choice models • compromise • reference point • similarityResearch on consumer behavior has shown repeatedly that consumers' choices depend on the specific set of alternatives in which an option is considered (e.g.
Motivated by many recent applications reported in the literature, we examine the impact of a second procurement opportunity on inventory management of products with short selling seasons. In our framework, the first order is placed at the start of the preseason and delivered at the start of the selling season; the second order is placed at or after the start of the selling season for subsequent delivery. Under this framework, the decision maker must make three interrelated choices: the first order quantity, when to place the second order, and the second order quantity. Our focus is on elucidating the optimal policy structure for the three interrelated decisions. By casting our models as sequential decision-making problems, we are able to reduce the optimization problems into sequential and embedded searches for the concerned decision variables that allow us to identify the conditions on the economic parameters and demand distribution to effectively facilitate the search for the optimal solutions.newsvendor problem, short selling season, second order opportunity, inventory management, optimal policy
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