Research On Behavioral Inventory Based On Minimum Requirement And Status Quo Reference Points

This paper studies a newsvendor model with the minimum requirement and the status quo reference points.In particular,the minimum requirement point is set as the exogenous decision,which is given by the outside system;the status quo is set as the endogenous decision,which is related to the decision.According to the theory of expected utility maximization,this paper researches the optimal order decision of the newsvendor model with different reference points,then analyzes the decision bias relative to a risk-neutral,single minimum requirement and single status quo reference newsvendor by comparing the optimal order decision,then verifies the "pullto-center" effect in the newsvendor model with two reference profits.Next,in the supply chain system,assuming that retailer makes order decisions based on the status quo,supplier maximizes profit and obtains supply chain system coordination by designing wholesale prices or buyback contracts.The study finds that the newsvendor's optimal order quantity with minimum requirement reference point will be less than the theoretical optimal order quantity.After adding the endogenous point,the order quantity may be greater than the theoretical optimal quantity.Therefore,there is competitive or cooperative relationship between endogenous and exogenous points.Moreover,the newsvendor with exogenous and endogenous reference points has a "pullto-center" effect under certain conditions.In the supply chain system,under the wholesale price contract,the supplier can increase the profit by using the retailer's status quo reference point information;under the buyback contract,the supplier will reduce profits when using reference point information.This paper not only theoretically enriches the study on decision making field with multiple reference points under uncertain demand,but also verifies the relevant experimental findings.In practice,it can also help enterprise managers to improve the cognition of the reference point effects,make more rational and effective ordering strategies,reduce product inventory management costs and increase corporate profits.