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Dissertation/Thesis Abstract

Optimal Inventory Strategy under Risk: A Contingent Claims Approach
by Klebe, Jesse Daniel, M.S., North Dakota State University, 2019, 254; 13859074
Abstract (Summary)

Inventory management in the agriculture industry involves many sources of risk in terms of demand uncertainty as well as uncertain margins. Divulging an optimal inventory strategy can prove cumbersome to logistics managers. In this thesis, inventory is viewed as a real option on the ability to operate. Contingent claims inventory (CCI) analysis, paired with stochastic binomial real option valuation, provides a model which values the real option embedded in holding inventory and iterates the purchasing strategy until expected profit is maximized. This framework is applied to three industry cases pertaining to: wheat flour milling, fertilizer merchandising, and bulk shipments via primary rail contracts.

Indexing (document details)
Advisor: Wilson, William W.
Commitee: Bullock, David, Nganje, William, Szmerekovsky, Joseph
School: North Dakota State University
Department: Agribusiness and Applied Economics
School Location: United States -- North Dakota
Source: MAI 58/05M(E), Masters Abstracts International
Subjects: Agricultural economics
Keywords: Agriculture economics, Finance, Management, Transportation
Publication Number: 13859074
ISBN: 978-1-392-16187-6
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