Mathematical Modeling for Risk Averse Firm Facing Loss Averse Customer’s Stochastic Uncertainty
Joint Authors
Lee, Jinpyo
Kim, Seungbeom
Park, Minjae
Source
Mathematical Problems in Engineering
Issue
Vol. 2017, Issue 2017 (31 Dec. 2017), pp.1-9, 9 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2017-04-11
Country of Publication
Egypt
No. of Pages
9
Main Subjects
Abstract EN
To optimize the firm’s profit during a finite planning horizon, a dynamic programming model is used to make joint pricing and inventory replenishment decision assuming that customers are loss averse and the firm is risk averse.
We model the loss averse customer’s demand using the multinomial choice model.
In this choice model, we consider the acquisition and transition utilities widely used by a mental accounting theory which also incorporate the reference price and actual price.
Then, we show that there is an optimal inventory policy which is base-stock policy depending on the accumulated wealth in each period.
American Psychological Association (APA)
Kim, Seungbeom& Lee, Jinpyo& Park, Minjae. 2017. Mathematical Modeling for Risk Averse Firm Facing Loss Averse Customer’s Stochastic Uncertainty. Mathematical Problems in Engineering،Vol. 2017, no. 2017, pp.1-9.
https://search.emarefa.net/detail/BIM-1191514
Modern Language Association (MLA)
Kim, Seungbeom…[et al.]. Mathematical Modeling for Risk Averse Firm Facing Loss Averse Customer’s Stochastic Uncertainty. Mathematical Problems in Engineering No. 2017 (2017), pp.1-9.
https://search.emarefa.net/detail/BIM-1191514
American Medical Association (AMA)
Kim, Seungbeom& Lee, Jinpyo& Park, Minjae. Mathematical Modeling for Risk Averse Firm Facing Loss Averse Customer’s Stochastic Uncertainty. Mathematical Problems in Engineering. 2017. Vol. 2017, no. 2017, pp.1-9.
https://search.emarefa.net/detail/BIM-1191514
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1191514