Two Types of Risk-averse Newsvendor Models with Limited Capacity

This article considers a newsvendor model, where the retailer is risk averse and his capacity is constrained. Two risk measures are considered: the downside risk measure and CVaR risk measure. Under the two measures, the optimal order quantities are obtained, and the impact of risk-averse degrees on the retailer's decision is analyzed. This model furthermore extends the classical newdvendor model, and it is more interesting and meaningful to consider the capacitated constraint in practice.