Abstract Achieving cost targets is a major concern for business managers. In this paper, we consider two risk management criteria for a production-inventory system under a cost target: Probability of Loss and Expected Loss. We study two models with stochastic demand and production: The unit stockout cost model and the backlogging cost rate model. We analyze a limited-information setting that is an excellent approximation to a full-information setting. We discover that the optimal inventory decisions for minimizing probability of loss are identical for both models, and that the optimal inventory decisions for minimizing expected loss share a similar structure for both models. In addition, we investigate inventory decisions when minimizing the expected cost subject to a probability of loss constraint. Extension to a generally-distributed unit production time is also explored. We provide comparative statics and managerial insights of value to loss-aware managers.

中文翻译：

---

在成本目标下优化生产库存系统

摘要 实现成本目标是业务经理的主要关注点。在本文中，我们考虑了成本目标下生产库存系统的两个风险管理标准：损失概率和预期损失。我们研究了两种具有随机需求和生产的模型：单位缺货成本模型和积压成本率模型。我们分析了一个有限信息设置，它是全信息设置的极好近似。我们发现用于最小化损失概率的最佳库存决策对于两种模型是相同的，并且用于最小化预期损失的最佳库存决策对于两种模型具有相似的结构。此外，我们研究了在受到损失概率约束的情况下最小化预期成本时的库存决策。还探索了对普遍分布的单位生产时间的扩展。我们为有损失意识的经理提供比较静态和有价值的管理见解。