Abstract:Yield and demand randomness are common in the industry, and loss aversion has been regarded as an inherent behavior for decision-makers. We combine these two factors and investigate a retailer’s ordering decisions under both yield and demand randomness with loss aversion. Before the selling season, the demand is unknown and the loss-averse retailer places an order from an unreliable supplier with an uncertain yield rate. After the demand and supply from the unreliable supplier are known, the retailer can carry… Show more
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