TY - JOUR
T1 - Customer balking behavior in the newsvendor model
T2 - Its impact on performance measures and decision under uncertain balking parameters
AU - Lee, Se Won
AU - Jung, Uk
PY - 2014/8
Y1 - 2014/8
N2 - In this paper, we investigate the performance measures of newsvendor model in an environment of customer balking, which occurs when customers are reluctant to buy a product if its available inventory falls below a threshold level. We derive the explicit expression of several performance measures in the newsvendor model with customer balking and also provide those upper or lower bound in the worst demand distribution. In addition, based on some properties associated with customer balking parameters, we suggest a constrained optimization problem to decide order quantity under the circumstance with uncertain balking parameters given as a form of range. We illustrate the concepts developed here through simple numerical examples and conclude with future research topics under the balking situation.
AB - In this paper, we investigate the performance measures of newsvendor model in an environment of customer balking, which occurs when customers are reluctant to buy a product if its available inventory falls below a threshold level. We derive the explicit expression of several performance measures in the newsvendor model with customer balking and also provide those upper or lower bound in the worst demand distribution. In addition, based on some properties associated with customer balking parameters, we suggest a constrained optimization problem to decide order quantity under the circumstance with uncertain balking parameters given as a form of range. We illustrate the concepts developed here through simple numerical examples and conclude with future research topics under the balking situation.
KW - Constrained optimization
KW - Customer balking
KW - Distribution-free approach
KW - Newsvendor model
KW - Performance measures
UR - http://www.scopus.com/inward/record.url?scp=84901710565&partnerID=8YFLogxK
U2 - 10.1016/j.ijpe.2014.05.002
DO - 10.1016/j.ijpe.2014.05.002
M3 - Article
AN - SCOPUS:84901710565
SN - 0925-5273
VL - 154
SP - 274
EP - 283
JO - International Journal of Production Economics
JF - International Journal of Production Economics
ER -