Operations Revenue Insurance

Paolo Guiotto, Andrea Roncoroni and Roméo Tédongap

Foundations and Trends(R) in Technology, Information and Operations Management, 2022, vol. 15, issue 3, 225-246

Abstract: We propose a new framework for the optimal design of a financial instrument to hedge nonclaimable (e.g., background, operational, and nontradable) risk embedded by business and operating revenues. Our method leverages the ability of financial markets to securitize nonfinancial assets and contingent claims written on the related notes. A new array of integrated operational and financial risk management policies is identified and an explicit solution is provided for a class of project allocation decisions.

Keywords: Supply Chain Management; Derivatives: Financial Engineering; Financial Markets: Security Issuance; Risk Analysis (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:now:fnttom:0200000102-1

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