The Effect of Overconfidence and Demand Uncertainty on Multiple Newsvendor Problem

The effect of overconfidence and demand uncertainty on multiple newsvendor problem is studied.In order to depict the decision-maker's overconfidence,we introduce a mean-increasing invariability and variance-decreasing transformation.The monotonicities of the optimal order quantity the number of the newvendor and the overconfident level are obtained.It is proved that larger demand leads to high optimal order quantity.It is compared the optimal order quantity under cut criterion order when demand distribution is uniform distribution.