As we know, there is a belief in the finance literature that Value at Risk (VaR) and Conditional Value at Risk (CVaR) are new approaches to manage and control the risk. Regard to, value at risk is not a coherent risk measure and it is not sub-additive and convex, so, we have considered...

This paper shows that, with pre-set price and capital decisions of firms facing uncertainty and credit rationing, price, mark up and the expected degree of capacity utilization (resp. capital) increases (resp. decreases) with the firm internal net worth

This paper studies the relationship between demand uncertainty — the key source of excess capacity — and capacity utilization in the U.S. airline industry. We present a simple theoretical model that predicts that lower demand realizations are associated with higher demand volatility. This...

Firms mitigate uncertainty in demand and supply by carrying safety stock, planning for excess capacity and diversifying supply sources. In this study, we provide a framework to jointly optimize these three levers in a periodic review infinite horizon setting, and in particular we examine how one...