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Satisficing Newsvendor Problem with the Optimism Coefficient

Bieniek Milena

Foundations of Computing and Decision Sciences

2019

Vol. 44, No. 3

261--271

In this research note the satisficing newsvendor problem is considered which is defined as the maximization of the probability of exceeding the expected profit multiplied by a positive constant. This constant called optimism coefficient can be chosen by the firm's management either based on their preference or the market conditions. The coefficient indicates whether there is a low or high optimistic decision maker. For the general demand distribution the results are significantly dependent on this coefficient.