A fundamental alternative for stochastic optimization problems named focus programming is proposed based on the focus theory of choice. Different from the existing approaches such as chance-constrained programming and two-stage stochastic programming which are based on expected utility theory,...

We propose a new newsvendor model with the focus theory of choice. Instead of calculating the expected utility, the model conceives that a retailer evaluates each order quantity by examining the most salient demand for him/her. The proposed model is a bilevel optimization problem with maximin...