Abstract: Based on consumer preference bias, a profit-order quantity decision model with stochastic demand under Conditional Value-at-Risk(CVaR)criterion was established. In order to optimize retailer's profit, when the demand is uncertain, the optimal ordering policy with the consideration of retailer's risk preference, consumer preference bias and product substitutability were discussed. The results show that when the order is in certain range, the ordering policy depends on consumer preference bias and not on the product substitutability. When the total order is in certain range, the optimal ordering quantity is positively correlated to the consumer preference bias factor and substitutable factor, and it has a negative correlation to the preference bias of another substitutable product and the retailer's risk averse. If the consumer bias between substitute products is bigger, the total ordering quantity will also be bigger.

Key words: ordering policy, consumer preference bias, substitutable products, conditional value-at-risk(CVaR)