Mean-Risk Analysis of Single-Period Inventory Problems

Part of the International Series in Operations Research & Management Science book series (ISOR, volume 178)


In this chapter, we carry out mean-risk analysis for the single-period inventory problems. We first construct the basic inventory control model under the mean-risk framework. We then present two kinds of mean-risk objective functions and analytically prove the existence of an efficient region for either mean-risk model. After that, we explore the construction of the efficient frontier in the mean-risk domain. Before we conclude, numerical analysis is presented to illustrate the mean-risk trade-off in the single-period inventory decision making problems.


Single-period Inventory Problem Mean-risk Objective Function Efficient Frontier Efficient Region Risk-averse Retailer 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Chen, F., & Federgruen, A. (2000). Mean-variance analysis of basic inventory models. Working paper, Columbia University.Google Scholar
  2. Choi, T. M., & Chiu, C. H. (2012). Mean-downside-risk and mean-variance newsvendor models: implications for sustainable fashion retailing. International Journal of Production Economics, 135, 552–560.CrossRefGoogle Scholar
  3. Choi, T. M., Li, D., & Yan, H. (2008). Mean-variance analysis for the newsvendor problem. IEEE Transactions on Systems, Man, and Cybernetics, Part A - Systems and Humans, 38, 1169–1180.CrossRefGoogle Scholar
  4. Lau, H. S. (1980). The newsboy problem under alternative optimization objectives. Journal of the Operational Research Society, 31, 525–535.Google Scholar
  5. Wu, J., Li, J., Wang, S., & Cheng, T. C. E. (2009). Mean–variance analysis of the newsvendor model with stockout cost. Omega, 37, 724–730.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2012

Authors and Affiliations

  1. 1.Institute of Textiles and ClothingThe Hong Kong Polytechnic UniversityHung Hom, KowloonHong Kong
  2. 2.Department of Management SciencesCity University of Hong KongKowloon Tong, KowloonHong Kong

Personalised recommendations