Optimal Ordering Policy of a Risk-Averse Retailer Subject to Inventory Inaccuracy

<table>Variation of <svg height="14.4125" id="M187" style="vertical-align:-3.39066pt" version="1.1" viewbox="0 0 11.375 14.4125" width="11.375" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink">
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<g transform="matrix(.012,-0,0,-.012,5.862,14.2)"><path d="M383 397q0 -32 -35 -49q-12 -6 -23 8q-37 45 -84 45t-90 -71q-40 -65 -40 -167q0 -57 22 -86t59 -29q38 0 81.5 24.5t69.5 51.5l16 -21q-44 -53 -104 -84t-109 -31q-56 0 -89.5 41t-33.5 117q0 61 30 124t79 105q33 28 81 50.5t86 22.5q34 0 59 -15.5t25 -35.5z" id="x1D450"></path></g>
</svg> with <svg height="7.9499998" id="M188" style="vertical-align:-0.1638pt" version="1.1" viewbox="0 0 7.0250001 7.9499998" width="7.0250001" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink">
<g transform="matrix(.017,-0,0,-.017,.062,7.675)"><path d="M383 397q0 -32 -35 -49q-12 -6 -23 8q-37 45 -84 45t-90 -71q-40 -65 -40 -167q0 -57 22 -86t59 -29q38 0 81.5 24.5t69.5 51.5l16 -21q-44 -53 -104 -84t-109 -31q-56 0 -89.5 41t-33.5 117q0 61 30 124t79 105q33 28 81 50.5t86 22.5q34 0 59 -15.5t25 -35.5z" id="x1D450"></path></g>
</svg> for different values of <svg height="7.9499998" id="M189" style="vertical-align:-0.1638pt" version="1.1" viewbox="0 0 9.7749996 7.9499998" width="9.7749996" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink">
<g transform="matrix(.017,-0,0,-.017,.062,7.675)"><path d="M545 106q-67 -118 -134 -118q-24 0 -40 37.5t-30 129.5h-2q-47 -72 -103 -119.5t-108 -47.5q-47 0 -76 45.5t-29 119.5q0 113 85 204t174 91q47 0 70 -33.5t43 -119.5h3q32 47 80 140l55 13l10 -9q-47 -80 -138 -201q17 -99 27.5 -136t22.5 -37q23 0 69 61zM333 204
q-14 98 -31 149.5t-50 51.5q-49 0 -94 -70t-45 -164q0 -55 15.5 -86t40.5 -31q70 0 164 150z" id="x1D6FC"></path></g>
</svg> and <svg height="16.6625" id="M190" style="vertical-align:-3.56265pt" version="1.1" viewbox="0 0 10 16.6625" width="10" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink">
<g transform="matrix(.017,-0,0,-.017,.062,12.162)"><path d="M558 587q0 -32 -14 -61t-40 -53.5t-48.5 -41t-54.5 -36.5q144 -51 144 -174q0 -55 -43.5 -108t-104.5 -87q-77 -42 -131 -42q-31 0 -54 20t-31 47l11 18q48 -29 108 -29q79 0 119.5 43t40.5 109t-44.5 107.5t-119.5 50.5l22 47q34 1 65 21q96 61 96 157q0 42 -24 67.5
t-62 25.5q-24 0 -43.5 -9t-35 -29.5t-27 -44t-22.5 -63t-19.5 -75.5t-18.5 -91q-57 -294 -68 -380q-26 -190 -35 -200q-26 -31 -97 -37l-4 26q19 9 48 170l77 413q23 121 52.5 187.5t83.5 114.5q70 62 148 62q51 0 88.5 -34t37.5 -91z" id="x1D6FD"></path></g>
</svg>.</table>

Mathematical Problems in Engineering

fig4

Figure 4

Figure 4: Optimal Ordering Policy of a Risk-Averse Retailer Subject to Inventory Inaccuracy 