A Newsvendor Model with CVaR Criterion: Partial Backlogging and Contingent Purchase Case+

摘要

In this paper, we consider a risk-averse newsvendor who has the option to purchase the units that are short at an emergency purchase price after demand is realized. Only a fraction of unsatisfied demand is backordered and the remaining fraction is lost. We use the Conditional Value-at-Risk (CVaR) as the newsvendor's performance measure. The aim of our study is to investigate the optimal decisions in such a setting. We derive the closedform optimal order quantity and perform comparative statics analysis to examine the impacts of parameters.