Administered commodity price schemes in developing countries have proved ineffective in raising farmers’ incomes and price stabilisation through futures markets is increasingly advocated as the alternative policy objective. A potential difficulty is that farmers tend not to hedge extensively, even in developed countries where access to futures markets is long established. Explanations for this ...

We study a manufacturing firm that builds a product to stock to meet a random demand. Production time is deterministic, so that if there is a backlog, customers are quoted a firm lead time that is proportional to the backlog. In order to represent the customers’ response to waiting, we introduce a new defection function — the probability that a customer chooses not to order as a function of the...

This paper addresses the problem of meeting a predetermined temperature target cost-effectively under uncertainty and gradual learning on climate sensitivity. An analytical solution to a stochastic cost-minimization problem with a temperature constraint is first provided, portraying an outline of the risk hedging solution. Then, numerical stochastic scenarios with cost curves fitted to recent c...

In this article the problem of inventory management of a single-stage singleproduct and two-machine-state continuous-flow manufacturing system with constant demand is considered. The machine is subject to operation-dependent failures. All the random variables are exponentially distributed. The goal is to obtain, in this case, the optimal policy which minimizes the discounted cost function. It i...

We consider the optimal control of an unreliable manufacturing system with restarting costs. In 1986 and 1988, Akella and Kumar (for the in nite horizon discounted cost) and Bielecki and Kumar (for the in nite horizon average expected cost) show that the optimal policy is given by an optimal inventory level (“hedging point policy”). Inspired by these simple systems, we explore a new class of mo...

1. Defining Uncertainty in Integrated Assessments 1.1. Integrated Assessments and Integrated Assessment Models 1.2. Different Categories of Uncertainties 1.3. Links between Integrated Assessment and Uncertainty 2. Implications of Uncertainty for Policy Formation 2.1. Uncertainty, Its Resolution, and the Policy Imperative 2.2. Uncertainty about Framing Questions and Adopting Decision Rules 3. Im...

We study the implications of financial hedging for corporate cash policy and value holdings. Using a web crawler program to collect data on use derivatives between 1993 2016, we find that US public firms with programs have smaller reserves but higher than without contracts in place. Our empirical results are robust when controlling potential endogeneity issues, governance, regimes alternative m...