Because inventory systems are managed or heavily influenced by decision makers, understanding human behaviors in inventory management has become an important research topic. Based on newsvendor decisions, in the literature, it has been argued that a few methods (e.g., ex-post inventory error,...

Prospect theory shows that human behavior in decision making can often be characterized by an S-shaped utility function. In this paper, we consider a periodic review inventory system with an exponential-type S-shaped utility function. The objective is to maximize the total expected utility over...

Based on the newsvendor setting, many behavioral models are proposed to predict biases of decision makers in inventory management. Recently, Nagarajan and Shechter claimed that prospect theory cannot explain the consistent empirical findings (Management Science, 2014, P.1057-1062). However, it...