A multi-attribute utility theory approach to ordering policy for perishable items
| Autor: | Saeed Poormoaied, Zümbül Atan |
|---|---|
| Přispěvatelé: | Operations Planning Acc. & Control |
| Jazyk: | angličtina |
| Rok vydání: | 2020 |
| Předmět: |
Economics and Econometrics
Mathematical optimization 021103 operations research Perishable items CVAR Computer science Utility theory 05 social sciences 0211 other engineering and technologies Inventory control policy 02 engineering and technology Function (mathematics) Management Science and Operations Research General Business Management and Accounting Measure (mathematics) Power-additive utility function Industrial and Manufacturing Engineering 0502 economics and business Multi-attribute utility Product (category theory) Sensitivity (control systems) Multi-attribute utility theory 050203 business & management |
| Zdroj: | International Journal of Production Economics, 225:107582. Elsevier |
| ISSN: | 0925-5273 |
| DOI: | 10.1016/j.ijpe.2019.107582 |
| Popis: | Most retailers aim at operating with low cost and low stock-out probability. In this paper, we consider a retailer who manages the inventory of a perishable product using a continuous review ( Q , r ) policy with these two performance measures. We rely on the multi-attribute utility theory to combine these two measures into a single weighted utility function. We incorporate the decision maker’s risk-aversion/risk-seeking attitude. We obtain the optimal policy parameters by maximizing the weighted utility function. We conduct a numerical study to demonstrate the sensitivity of the optimal policy parameters to the risk-aversion/risk-seeking attitude of the decision maker and weights of evaluation measures. Our results reveal that the risk behavior does not have a significant effect on policy parameters while the weights of evaluation measures are influential. We compare our multi-attribute utility model with three well-known alternative ( Q , r ) policies. In the first one, we study the expected cost as a single performance measure. In the second one, we consider a service level constraint and in the third one, we use CVaR measure. We conclude that our multi-attribute approach has multiple favorable attributes compared to its widely used alternatives. |
| Databáze: | OpenAIRE |
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