Understanding the stochastic enviornment is as much important to the manager as to the ecomist. From production and marketing to financial management, a manager has to assess various costs imposed by uncertainty. The ecomist analyzes the role of incomplete and too often imperfect information structures on the optimal decisions made by a firm. The need for understanding the role of uncertainty in quantitative decision models, both in ecomics and management science provide the basic motivation of this mograph. The stochastic environment is analyzed here in terms of the following specific models of optimization: linear and quadratic models, linear programming, control theory and dynamic programming. Uncertainty is introduced here through the para- meters, the constraints, and the objective function and its impact evaluated. Specifically recent developments in applied research are emphasized, so that they can help the decision-maker arrive at a solution which has some desirable charac- teristics like robustness, stability and cautiousness. Mathematical treatment is kept at a fairly elementary level and applied as- pects are emphasized much more than theory. Moreover, an attempt is made to in- corporate the ecomic theory of uncertainty into the stochastic theory of opera- tions research. Methods of optimal decision rules illustrated he re are applicable in three broad areas: (a) applied ecomic models in resource allocation and ecomic planning, (b) operations research models involving portfolio analysis and stochastic linear programming and (c) systems science models in stochastic control and adaptive behavior.
J. K. Sengupta
Springer-Verlag Berlin and Heidelberg GmbH & Co. KG
Date of Publication
Economics: Professional & General
Place of Publication
Country of Publication
Springer-Verlag Berlin and Heidelberg GmbH & Co. K