A Mean-Variance Approach for Optimizing Physical Commodity Production Decisions
By Tom Soutter, Trader, Fonterra Co-operative (New Zealand) and Isaac Manuel, Trader, Fonterra Co-operative (New Zealand)
This paper examines an approach to optimizing physical production decisions that considers risk. The paper discusses how to adapt the mean-variance-optimization approach to a constrained processor situation where the processor takes a raw input and has the option to refine it into many products.
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