International Scientific Conference „Contemporary Issues in Business, Management and Education“, International Scientific Conference „Contemporary Issues in Business, Management and Education“

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Reliability as main factor for future value creation
Aleksandras Vytautas Rutkauskas, Viktorija Stasytytė, Andrius Rutkauskas

Last modified: 2017-05-10

Abstract


The main objective of the paper is to present the solution for the problem of possibilities’ reliability management, as an important problem of uncertainty (risk) economics, as well as propose adequate methods of stochastic optimization and reveal their broad implementation possibilities.

When the science of economics solves its main problem – what are the key production, distribution and consumption factors, and how they are being formed, this problem is always analysed in the context of rational allocation of scarce resources. But how the solution criteria should be reasoned, when we meet a lot of situations of uncertainty or its structured state – the risk? How one should allocate the possessed or intended to use resources, if the cost of goods, sales prices and cost of logistics can be assessed only as random variables (probability distributions of possible values)?

In the paper the adequate forecasting methods of the used indicators will be presented, the concept of the utility function will be disclosed, when we take into account not only the possibilities of prices and costs, but also their reliability, in order to achieve the highest value added in this process. The original methods of stochastic optimization will be used, while searching for the optimal allocation of sales among markets, allocation of invested capital among the investment assets, etc.

Along with the reliability of possible values, as a key problem of risk economics, training of the universally sustainable development and social welfare will be disclosed, that is already in the spotlight of the authors. The possibilities of integral solution will be revealed, because both presented types of problems in the view of context as well as of transformation are stochastic processes.

 

DOI: https://doi.org/10.3846/cbme.2017.075


Keywords


reliability, risk economics, forecasting methods, uncertainty

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