Mean-Risk Analysis of Single-Period Inventory Problems
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In this chapter, we carry out mean-risk analysis for the single-period inventory problems. We first construct the basic inventory control model under the mean-risk framework. We then present two kinds of mean-risk objective functions and analytically prove the existence of an efficient region for either mean-risk model. After that, we explore the construction of the efficient frontier in the mean-risk domain. Before we conclude, numerical analysis is presented to illustrate the mean-risk trade-off in the single-period inventory decision making problems.