Behavioral Implications of Demand Perception in Inventory Management

The newsvendor problem is one of the rudimentary problems of inventory management with significant practical consequences, thus receiving considerable attention in the behavioral operational research literature. In this chapter, we focus on how decision makers perceive demand uncertainty in the newsvendor setting and discuss how such perception patterns influence commonly observed phenomena in order decisions, such as the pull-to-center effect. Drawing from behavioral biases such as over precision, we propose that decision makers tend to perceive demand to be smaller than it actually is in high margin contexts, and this effect becomes more pronounced with increases in demand size. The opposite pattern is observed in low margin settings; decision makers perceive demand to be larger than the true demand, and this tendency is stronger at lower mean demand levels. Concurrently, decision makers tend to perceive demand to be less variable than it actually is, and this tendency propagates as the variability of demand increases in low margin contexts and decreases in high margin contexts. These perceptions, in turn, lead to more skewed decisions at both ends of the demand spectrum. We discuss how decision makers can be made aware of these biases and how decision processes can be re-designed to convert these unconscious competencies into capabilities to improve decision making

Encapsidation of yeast killer double-stranded ribonucleic acids: dependence of M on L.

Virus-like particles containing either L or M double-stranded ribonucleic acid (dsRNA) were isolated from a killer toxin-producing strains of Saccharomyces cerevisiae (K+ R+). At least 95% of M- and 87% of L-dsRNA were recovered in virus-like particle-containing fractions. The major capsid polypeptides (ScV-P1) of both L and M virus-like particles were shown to be identical, and 95% of the cellular ScV-P1 was found in the virus-like particle-containing fractions. Since L-dsRNA encodes ScV-P1, provision of this protein for encapsidation of M-dsRNA defines at least one functional relationship between these dsRNA genomes and associates the L-dsRNA with the killer character. If encapsidation of M-dsRNA is essential for its replication or expression, then L-dsRNA plays an essential role in maintenance or expression of the killer phenotype. The relationship between the L- and M-dsRNA genomes would be analogous to that between a helper and a defective virus. The presence of only minor quantities or uncomplexed dsRNA and ScV-P1 suggests that their production is stringently coupled