INCORPORATING SAFETY-FIRST CONSTRAINTS IN LINEAR PROGRAMMING PRODUCTION MODELS

Joseph A. Atwood, Myles J. Watts, Glenn A. Helmers and Larry J. Held

Western Journal of Agricultural Economics, 1988, vol. 13, issue 01, 8

Abstract: A recent survey indicated that many procedures view risk in a safety-first context. Traditional methods used to impose safety-first constraints in optimization models have often been difficult to implement. This is particularly true when endogenous decisions affect the distribution of the chance-constrained random variable. This paper presents a method whereby probabilistic constraints can be easily imposed upon finitely discrete random variables. The procedure uses a linear version of the lower partial moment stochastic inequality. The resulting solutions are somewhat conservative but are less so than the results using the previously published mean income-absolute deviation stochastic inequality.

Keywords: Production Economics; Research Methods/Statistical Methods (search for similar items in EconPapers)
Date: 1988
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:wjagec:32152

DOI: 10.22004/ag.econ.32152

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