Loss-Averse Aviation Enterprises’ Procurement Decisions on Spare Parts

As the aviation industry thrives, the market for aviation spare parts is witnessing unprecedented growth. The procurement of aviation spare parts holds paramount importance for the operational and managerial efficacy of aviation enterprises. Ensuring scientific, rational, and precise procurement of these aviation spare parts constitutes a pivotal strategy for aviation enterprises to effectively manage operational costs and enhance efficiency. The formulation of procurement strategies is critically affected by losses experienced in aviation spare parts procurement. Given the substantial variation in loss aversion among different aviation enterprises, studying the decision-making patterns in aviation spare parts procurement under diverse levels of loss aversion assumes considerable theoretical significance. This paper employs prospect theory and considers the scenario where the budget cost aligns with the purchasing cost, serving as the psychological break-even point for aviation spare parts procurement. This paper introduces loss aversion theory into the research on aviation spare parts procurement. This paper investigates the correlation between aviation spare parts procurement quantity and its influencing factors, and conducts a sensitivity analysis of key variables. Based on the analytical results, insights and suggestions for procurement practices are proposed. These innovations are shown to contribute to the development of loss aversion theory and decision-making procurement, thereby offering valuable guidance for aviation spare parts procurement.