A central problem in planning production capacity is how to effectively manage demand risk. We develop a model that integrates capacity planning and risk hedging decisions under a popular risk measure, conditional value at risk (CVaR). The CVaR objective generalizes the usual risk-neutral...

We study a system with heterogeneous parallel servers, each with an infinite waiting room. Upon arrival, a job is routed to the queue of one of the servers. The objective is to find the routing policy that best utilizes the available state information to minimize the expected stationary queue...