Two risk control mechanisms, namely, cash deposit, and loan limits based on retained profit or maximum expected guarantor profit, are developed for capital-constrained newsvendor financing. Results show that with a large initial capital mortgage asset, the reduces order quantity to avoid bankruptcy risk. Under mechanism gains greater when has low capital. Setting limit is thus an effective news...

Demand for a seasonal product persists for a fixed period of time. Normally the “finite time horizon inventory control problems” are formulated for this type of demands. In reality, it is difficult to predict the end of a season precisely. It is thus represented as an uncertain variable and known as random planning horizon. In this paper, we present a production-inventory model for deterioratin...

Social influence has been shown to create significant unpredictability in cultural markets, providing one potential explanation why experts routinely fail at predicting commercial success of cultural products. As a result, social influence is often presented in a negative light. Here, we show the benefits of social influence for cultural markets. We present a policy that uses product quality, a...

Allocating limited computational resources to different clients is always a challenging problem to a web service provider (WSP). Profit density based greedy knapsack algorithm is one simple approach that can ensure near-optimal profit. However, profit gain is sometimes not the only factor concerned in making important management decisions. Other factors, such as the number of clients that a WSP...

We investigate an automobile supply chain where a manufacturer and a retailer serve a market with a fuel-effi cient automobile under a scrappage program by the government. The program awards a subsidy to each consumer who trades in his or her used automobile with a new fuel-effi cient automobile, if the manufacturer’s suggested retail price (MSRP) for the new one does not exceed a cutoff level....

In this paper, we propose a stochastic production planning model for a biofuel supply chain under demand and price uncertainties. The supply chain consists of biomass suppliers, biofuel refinery plants and distribution centers. A stochastic linear programming model is proposed within a single-period planning framework to maximize the expected profit. Decisions such as the amount of raw material...

The newsvendor model is the cornerstone of most periodic inventory models; however, it distorts the correct timing of inventory costs and thus misses the optimal solution of the inventory system. This work presents a modification of the classical newsvendor model that considers the holding cost according to the stock-levels within the selling period rather than according to the stock-level at t...

A major concern in the design of wholesale electricity markets is the potential for the exercise of market power by generating unit owners. To better understand the determinants of generating unit owner market power and how it is exercised, this paper derives a model of bidding behavior in a competitive electricity market which incorporates various sources of uncertainty and the impact of the e...

This paper addresses a rationing problem in a two-level, vertically integrated distribution system composed of one manufacturer and several retail points. The motivating case, developed in the vending machine sector and modeled as a newsvendor-like problem, is representative of many real settings where short-term changes in demand can be substantial while capacity modification is not a viable o...