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Price uncertainty and the effect of capital costs in a point in-point out inventory investment

Authors :
Thorstenson, Anders
Hultman, Peter
Source :
Managerial & Decision Economics. Sept-Oct, 1992, Vol. 13 Issue 5, p389, 9 p.
Publication Year :
1992

Abstract

A study was conducted to analyze point in-point out inventory investment under price uncertainty. The study assumes that optimal quantity is reached when investors maximize their risk preference's expected value. An exponential risk preference function is applied in examining optimal quantity adjustment based on interest rate variation. Results show that adjustment is conditioned by profit and price distribution schemes.

Details

ISSN :
01436570
Volume :
13
Issue :
5
Database :
Gale General OneFile
Journal :
Managerial & Decision Economics
Publication Type :
Academic Journal
Accession number :
edsgcl.13666578