Published in Economics Letters, 185, 2019. https://doi.org/10.1016/j.econlet.2019.108746
Previously distributed as Kelley School of Business Research Paper, No. 20-53.
Abstract: I provide three comparative statics involving the level of demand uncertainty for the newsvendor model, two of which lead to robust predictions. I show that for distributions of demand that are greater in the dispersive order, both the expected (censored) sales and share of inventory sold fall. These monotone comparative statics occur despite the lack of one for the (optimal) inventory choice.
The most recent version of the working paper is available as a pdf. (12 pages, 221 KB)
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