Satisficing Newsvendor Problem with the Optimism Coefficient

Milena Bieniek

doi:10.2478/fcds-2019-0013

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Satisficing Newsvendor Problem with the Optimism Coefficient

Foundations of Computing and Decision Sciences

Volume 44 (2019): Issue 3 (September 2019)

By: Milena Bieniek

Open Access

|Aug 2019

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Abstract

In this research note the satisficing newsvendor problem is considered which is defined as the maximization of the probability of exceeding the expected profit multiplied by a positive constant. This constant called optimism coefficient can be chosen by the firm’s management either based on their preference or the market conditions. The coefficient indicates whether there is a low or high optimistic decision maker. For the general demand distribution the results are significantly dependent on this coefficient.

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