Abstract
A supplier sells to a retailer who serves a market with uncertain demand. Before the season starts, the retailer preorders from the supplier, who stocks to satisfy at least the preorder. After the actual demand is realized, the retailer can place an at-once order, which is satisfied up to stock availability. Market demand, as perceived by a firm, can differ from what it actually is. We find that a firm can benefit from holding an inaccurate market belief.
Original language | English |
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Pages (from-to) | 150-156 |
Number of pages | 7 |
Journal | Operations Research Letters |
Volume | 49 |
Issue number | 1 |
DOIs | |
Publication status | Published - Jan 2021 |
Keywords
- Contracting arrangement
- Market belief
- Newsvendor
ASJC Scopus subject areas
- Software
- Management Science and Operations Research
- Industrial and Manufacturing Engineering
- Applied Mathematics