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영어

This study is to verify the effects of regret that decision-maker feels from the difference between order quantity and actual demand quantity via newsvendor model. Newsvendor model shows that rational decision-maker decides optimal order quantity using demand information. However, the decision-maker who has limited rationality feels regret whenever the difference between order quantity and actual demand quantity takes place and then adjust order quantity. This research studies that the level of regret which decision maker feels would be changed depending on demand uncertainty. Also, the level of regret would influence adjusted order quantity, and whether demand information is given or not, the relationship between the level of regret and adjusted order quantity would be changed. To testify this study, we have executed newsvendor model experiment: depending on whether the information is given or not, and level of demand uncertainty (low/mid/high). As a result, regret level is changed depending on the level of uncertainty level, and regret level has significant impacts on size and frequency of adjusted order quantity.