Journal
INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS
Volume 135, Issue 2, Pages 552-560Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.ijpe.2010.10.004
Keywords
Fashion supply chain management; Mean-downside risk analysis; Mean-variance analysis; Newsvendor problem
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Newsvendor models have been well-established for studying supply chain management problems with fashionable products. In this paper, we explore the mean-downside-risk (MDR) and mean-variance (MV) newsvendor models under both the exogenous and endogenous retail price decision cases. We first construct analytical models with the MDR and MV objectives. We then show that the analytical solution schemes for both the MDR and MV problems are the same. With the measures for sustainability such as the expected quantity of goods leftover, the expected sales to expected goods leftover ratio, the rate of return on investment, and the probability of achieving a pre-determined profit target, we proceed to compare the levels of sustainability by the fashion retailers which employ the mean-risk and the risk neutral models. Insights are generated. (C) 2010 Elsevier B.V. All rights reserved.
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