Research on Ordering Decision of Fresh E-commerce Retailers Considering Waste Aversion and Stock-Out Aversion

Affected by the perishable nature of fresh commodities and the high uncertainty of its market demand, decision-makers often have irrational ordering behaviors such as being too conservative or too radical. Based on this, we considered that fresh e-commerce retailers may have waste aversion preference and stock-out aversion preference, and studied the optimal order quantity decision and preservation effort decision under different behavioral preferences. The results show that the optimal order quantity and profit of a fresh e-commerce retailers with waste aversion are always smaller than that of a rational one. When a fresh e-commerce retailer has stock-out aversion preference, the relationship between the optimal order quantity and the degree of stock-out aversion, as well as that between the optimal profit and the degree of stock-out aversion depend on the profit margin of the product. If the degree of stock-out aversion is high, the expected profit of a fresh e-commerce retailer with a waste aversion preference is higher than that of a rational one, that is, stock-out aversion brings a higher profit to the fresh e-commerce enterprise. In addition, Waste aversion and stock-out aversion always have negative impacts on the preservation effort investment.