The Distributionally Robust Inventory Strategy of the Overconfident Retailer under Supply Uncertainty

Wu, Dasheng; Chen, Feng

doi:10.3390/systems11070333

Cited by 2 publications

(1 citation statement)

References 67 publications

(113 reference statements)

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“…Ref. [42] showed that overconfidence would prompt the retailer to order more under low-profit conditions, whereas it reduces the order quantity under high-profit conditions. The authors in [34] established that fairness concerns among supply chain partners enable supply chain coordination.…”

Section: Behavioral Newsvendor Modelmentioning

confidence: 99%

Decentralized Inventory Transshipments with Quantal Response Equilibrium

Shi

et al. 2023

Systems

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Despite the benefits of inventory transshipment, numerous behavioral experiments have revealed that retailers often deviate from the Nash-equilibrium ordering quantities, which in turn impacts the potential advantages. Motivated by this issue, we developed a behavioral model to analyze the deviation of ordering quantities among two independent retailers who engage in inventory transshipment from the perspective of analytical modeling. In our model, we incorporated bounded rationality with the quantal response equilibrium. Firstly, we established the existence of such a quantal response equilibrium and provided the conditions for its uniqueness. Secondly, we compared the quantal response equilibrium with the Nash equilibrium within a certain range of transshipment prices and observed that the limiting quantal response equilibrium is equivalent to the Nash equilibrium. Lastly, we design an iterative algorithm that incorporates the learning effects of the retailers to determine the quantal response equilibrium for the ordering quantity. The results indicate that the optimal ordering quantity and the nearby ordering quantities should be chosen with higher probabilities. Additionally, the retailer should gradually enhance their cognitive or computational abilities through repeated transshipment games to improve their decision-making process. Furthermore, to ensure a balanced inventory-sharing system, the evaluation of inventory strategies should consistently prioritize avoiding surplus instead of shortage.

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Section: Behavioral Newsvendor Modelmentioning

confidence: 99%

Decentralized Inventory Transshipments with Quantal Response Equilibrium

Shi

et al. 2023

Systems

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A Robust Optimization Model for Emergency Location Considering the Uncertainty and Correlation of Transportation Network Capacity

Jiang,

Song

2024

Systems

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Emergencies often lead to the impairment of infrastructure systems, including transportation systems. It is necessary to analyze the uncertainty and correlation of transportation network capacity caused by emergencies, aiming at the problems of emergency facilities’ location and matching in emergency contexts. This study introduces novel concepts, such as flow distribution betweenness centrality (FD-BC) and the transport capacity effect coefficient (TC-EC). Furthermore, we introduce the ellipsoidal uncertainty set to characterize uncertainties in transport capacity. We construct a multi-criteria decision-making (MCDM) model and a multi-strength elitist genetic algorithm (multi-SEGA) to ensure the lower limit of transport capacity between demand and emergency points while minimizing decision-making costs. By designing an uncertain scenario example, we analyze the effect of the perturbation ratio and the uncertainty level on the robust location model. The following results were drawn: (1) Indicators FD-BC and TC-EC effectively indicated the importance of each section in the emergency transportation network. (2) The optimal value of the model’s objective function changed more significantly as the perturbation ratio and uncertainty level increased. (3) After reaching a certain uncertainty level, the robust model with an ellipsoidal uncertainty set became more conservative than the robust model with a box uncertainty set, which lacked practical significance. The research results guarantee the robustness of the emergency support system in uncertain conditions.

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The Distributionally Robust Inventory Strategy of the Overconfident Retailer under Supply Uncertainty

Cited by 2 publications

References 67 publications

Decentralized Inventory Transshipments with Quantal Response Equilibrium

Decentralized Inventory Transshipments with Quantal Response Equilibrium

A Robust Optimization Model for Emergency Location Considering the Uncertainty and Correlation of Transportation Network Capacity

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