We study production planning integrated with risk hedging by considering shortfall as the risk measure. In addition to the one-time production quantity decision, there is a real-time hedging strategy throughout the horizon; and the goal is to minimize the gap between a pre-specified target and...

Demand for many products may depend on the price of a tradable asset or on the economy in general. For instance, demand for equipment that plants or harvests corns correlates with the fluctuations of the corn price on the commodity market; and discount stores experienced increased sales revenue...