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Complex dynamic analysis of risk-averse newsvendor models with buyback guarantee financing

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  • Jianxin Chen
  • Tonghua Zhang
  • Yong-wu Zhou
  • Rui Hou

Abstract

In the framework of the newsvendor model, both single- and multi-period models are proposed to investigate the ordering strategy of a risk-averse retailer under buyback guarantee financing (BGF) and stochastic demand. In the single-period model, the classical newsvendor is extended by introducing risk aversion and capital constraints simultaneously. It is found that the optimal ordering quantity is a monotonic function in some parameters, such as increasing in the retailer's risk aversion and salvage value, while decreasing in the initial capital and wholesale price. The multi-period model is a dynamical model described by the bounded rationality decision adjustment rules. We then investigate the complex dynamics they admit, such as period-doubling bifurcation and chaotic phenomena, and have found that the dynamical models experience more complex behaviour than their static counterpart. Furthermore, in the dynamical case, we could see periodic, bifurcating or chaotic changes in ordering quantity. We also investigate the influence of BGF on ordering quantity, which may lead to a risk-averse retailer to order aggressively. Finally, some numerical simulations are given to illustrate the theoretical results and some suggestions are also provided.

Suggested Citation

  • Jianxin Chen & Tonghua Zhang & Yong-wu Zhou & Rui Hou, 2022. "Complex dynamic analysis of risk-averse newsvendor models with buyback guarantee financing," International Journal of Production Research, Taylor & Francis Journals, vol. 60(9), pages 2865-2883, May.
  • Handle: RePEc:taf:tprsxx:v:60:y:2022:i:9:p:2865-2883
    DOI: 10.1080/00207543.2021.1905901
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    Cited by:

    1. Haozhe Huang & Xiaowei Li & Shuai Liu, 2022. "Loss Aversion Order Strategy in Emergency Procurement during the COVID-19 Pandemic," Sustainability, MDPI, vol. 14(15), pages 1-10, July.
    2. Chen, Jianxin & Hou, Rui & Xiao, Lu & Zhang, Tonghua & Zhou, Yongwu, 2023. "Dynamic corporate social responsibility adjustment strategies of a closed-loop supply chain with fairness concerns and supply chain financing," Chaos, Solitons & Fractals, Elsevier, vol. 168(C).
    3. Zhen, Zhiyuan & Jiang, Lan & Yan, Qiang, 2024. "The evolution of portfolio financing equilibrium in a risk-averse supply chain under a partial trade credit policy," Finance Research Letters, Elsevier, vol. 62(PA).
    4. Zhu, Xiaoliang & Guo, Zixue & Yang, Guoqing, 2023. "Credit coguarantee loan buyback contracts: Equilibrium and coordination strategies," International Journal of Production Economics, Elsevier, vol. 262(C).
    5. Chen, Jianxin & Hou, Rui & Zhang, Tonghua & Zhou, Yongwu, 2024. "Newsvendor model for a dyadic supply chain with push-pull strategy under shareholding and risk aversion," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 221(C), pages 645-662.
    6. Wang, Qingwei & Zheng, Meimei & Lee, Ka-Man & Shi, Xiaoqian & Shen, Yichi & Pan, Ershun, 2024. "Optimal product and after-sales service decisions considering risk attitudes under price-dependent uncertain demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 182(C).

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