Under stochastic demand condition, considering stockout loss, loss-averse retailer’s utility function is established
based on prospect theory. According to mathematical model deduction, optimal order quantity model for loss-averse retailer
is attained. Relationships of loss-averse retailer’s order quantity with loss-averse coefficient, retail price, purchase price, unit
salvage value, unit shortage loss are analyzed. Main conclusions show that order quantity increases with unit salvage value,
unit shortage loss increasing, but increases or decreases with loss-averse coefficient, retail price, purchase price increasing,
which indicates that loss-averse has important effect on order decision-making. Finally, simulation analysis shows the
correctness of the relationships between order and loss-averse coefficient, retail price, purchase price, unit salvage value,
unit shortage loss, respectively.