Valuing the lead time of periodic forecasts in dynamic production systems
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The question addressed is, how does the value of climate forecasts change as a function of when they are received? This value is highly sensitive to the expectations of the decision maker at the beginning of the planning horizon. A procedure is developed which allows a decision maker to anticipate the issuance of forecasts in a dynamic programming framework. This procedure is contrasted with a previous methodology in which the decision maker was unaware that a climate forecast would be issued until the forecast was received. Results show that using the 'unaware' methodology may overstate the value of receiving forecasts earlier. © 1993.
author list (cited authors)
Mjelde, J. W., & Dixon, B. L.