Platform charges shall be applicable from 1st Oct 2017

b

Inventory Hedging

Our solutions help both risk neutral and risk aversion decision makers.

FINVASIA recognizes the problem of risks of inventory hedging for short term or cyclic period when the demand is correlated with worth of a financial asset.

We determine how to build optimal hedging transactions that reduces variance of profit and maximizes the expected effectiveness for a risk averse decision maker. We also explain the wide range of hedging strategies and effectiveness/utility functions, a risk-off decision maker instructs more inventory when he hedge the risk of inventory.

Why choose us?

1. Reliable data feeds

The information of price of the financial asset is utilized to find both level of optimal inventory as well as hedge.

2. Effective forecasting

Our solutions provide decision maker to notify with the demand forecast and the financial hedge strategies as more order information is available.

us?

3. Less risk and better returns

Hedging takes to lesser risk and better returns on inventory investments. We exemplify these advantages using information from a retailing firm.

We address that hedging impacts both risk-neutral & risk aversion decision makers:

 

  1. Hedging decreases the variance of profit and maximizes the utility/effectiveness expectation. The decrease in the variance of profit is directly proportinal to the correlation of demand & price of financial asset.
  2. It offers a benefit to risk off decision maker to arrange a quantity that is near to predictable value maximizing quantity. This would hold wide range of hedging strategies and for increasing concave utility functions with stable or minimizing total risk aversion.
  3. The hedging transactions don’t need any further investment. On the other side, the funds needed to finance inventory at the start of preparation period are offset by hedging transactions, so that firm’s net inventory investment is minimized.