Firms can benefit from inaccurate market beliefs

A supplier sells to a retailer who serves a market with uncertain demand. Before the season starts, the retailer preorders from the supplier, who stocks to satisfy at least the preorder. After the actual demand is realized, the retailer can place an at-once order, which is satisfied up to stock availability. Market demand, as perceived by a firm, can differ from what it actually is. We find that a firm can benefit from holding an inaccurate market belief.     

Traveling wave solutions in a diffusive system with two preys and one predator

This paper is concerned with the traveling wave solutions in a diffusive system with two preys and one predator. By constructing upper and lower solutions, the existence of nontrivial traveling wave solutions is established. The asymptotic behavior of traveling wave solutions is also confirmed by combining the asymptotic spreading with the contracting rectangles. Applying the theory of asymptotic spreading, the nonexistence of traveling wave solutions is proved.     

Selling to the “Newsvendor” with a forecast update: Analysis of a dual purchase contract

We consider a supply chain in which a manufacturer sells to a procure-to-stock retailer facing a newsvendor problem with a forecast update. Under a wholesale price contract, the retailer waits as long as she can and optimally places her order after observing the forecast update. We show that the retailer’s wait-and-decide strategy, induced by the wholesale price contract, hinders the manufacturer’s ability to (1) set the wholesale price and maximize his profit, (2) hedge against excess inventory risk, and (3) reduce his profit uncertainty. To mitigate the adverse effect of wholesale price contract, we propose the dual purchase contract, through which the manufacturer provides a discount for orders placed before the forecast update. We characterize how and when a dual purchase contract creates strict Pareto improvement over a wholesale price contract. To do so, we establish the retailer’s optimal ordering policy and the manufacturer’s optimal pricing and production policies. We show how the dual purchase contract reduces profit variability and how it can be used as a risk hedging tool for a risk averse manufacturer. Through a numerical study, we provide additional managerial insights and show, for example, that market uncertainty is a key factor that defines when the dual purchase contract provides strict Pareto improvement over the wholesale price contract.     

Contracting on Average Random IFS with Repelling Fixed Point

We consider random iterated function systems which consist of strictly increasing and (not necessarily strictly) convex functions on a compact interval or on a half line. We assume that the system is contracting on average in a sense which is wide enough to permit the existence of a common fixpoint at which some functions of the system are expanding and perhaps none of them are contracting (see Fig. 1). We prove that the Hausdorff dimension of any of the possibly uncountably many invariant measures is smaller than or equal to the accumulated entropy divided by the Liapunov exponent. Mathematics Subject Classification. Primary 42A85 Secondary 11R06; 26A46; 26A30; 26A78; 28A80     

Divisors of the number of Latin rectangles

A k×n Latin rectangle on the symbols {1,2,…,n} is called reduced if the first row is (1,2,…,n) and the first column is T(1,2,…,k). Let Rk,n be the number of reduced k×n Latin rectangles and m=⌊n/2⌋. We prove several results giving divisors of Rk,n. For example, (k−1)! divides Rk,n when k?m and m! divides Rk,n when m<k?n. We establish a recurrence which determines the congruence class of for a range of different t. We use this to show that Rk,n≡((−1)^k−1(k−1)!)ⁿ⁻¹. In particular, this means that if n is prime, then Rk,n≡1 for 1?k?n and if n is composite then if and only if k is larger than the greatest prime divisor of n.     

Contracting with asymmetric demand information in supply chains

We solve a buyback contract design problem for a supplier who is working with a retailer who possesses private information about the demand distribution. We model the retailer’s private information as a space of either discrete or continuous demand states so that only the retailer knows its demand state and the demand for the product is stochastically increasing in the state. We focus on contracts that are viable in practice, where the buyback price being strictly less than the wholesale price, which is itself strictly less than the retail price. We derive the optimal (for the supplier) buyback contract that allows for arbitrary allocation of profits to the retailer (subject to the retailer’s reservation profit requirements) and show that in the limit this contract leads to the first-best solution with the supplier keeping the entire channel’s profit (after the retailer’s reservation profit).     

A Remark on the Existence of Solutions to Nonlinear Equations with Degenerate Mappings

The paper studies nonlinear mappings using methods of p-regularity theory and some concepts and technics of set-valued analysis. The main result addresses to the problem of existence of solutions to nonlinear equations in the degenerate case where a linear part may be singular at the considered initial point.      

Topological attractors of contracting Lorenz maps

We study the non-wandering set of contracting Lorenz maps. We show that if such a map f doesn't have any attracting periodic orbit, then there is a unique topological attractor. Furthermore, we classify the possible kinds of attractors that may occur.