We consider a newsvendor problem in a supply chain that consists of a manufacturer and a retailer. The manufacturer is the Stackelberg leader and the retailer is the follower.We examine how themanufacturer can contract awholesale-price-only agreementwith its retailer thatmaximizes its profit.We also propose a returns policy with a wholesale-price-discount scheme (returns-discount contract) that...

W consider a repeated newsvendor problem in which the decision maker (DM) does not have access to the underlying demand distribution. The goal of this paper is to characterize the implications of demand censoring on performance. To that end, we compare the benchmark setting in which the DM has access to demand observations to a setting in which the DM may only rely on sales data. We measure per...

We study profit maximization vs risk approaches for the standard newsvendor problemwith uncertainty in demand as well as a generalized version with uncertainty in the shortage cost (as often applies in practice). We consider two well-known risk approaches: Value-at-Risk (VaR) included as a constraint and Conditional Value-at-Risk (CVaR). We first derive the explicit expressions of the optimal s...

We show that when a supply channel is capacity-constrained and the constraint is tight, there is a set of linear wholesale price contracts that coordinates the channel while allowing the supplier to make a profit. We prove this for the one-supplier/one-newsvendor supply channel as well as the many-supplier/one-newsvendor channel configuration (with each supplier selling a unique product). We an...

<p style='text-indent:20px;'>This paper studies a single-period inventory problem with quantity-oriented reference point, where the newsvendor has loss-averse preferences and conditional value-at-risk (CVaR) measure is introduced to hedge against his risk. It shown there exists unique optimal order quantity maximizing CVaR of utility. Moreover, it decreasing in loss aversion level, confid...

We generalize analysis of competition among newsvendors to a setting in which competitors possess asymmetric information about future demand realizations, and this information is limited to knowledge of the support of demand distribution. In such a setting, traditional expectation-based optimization criteria are not adequate and therefore we focus on the alternative criterion used in the robust...