| Abstract: | This paper presents a novel approach for dealing with risk in agricultural resource allocation decisions by synthesising the conventional Markowitzean, or MOTAD, methods within a compromise programming model to generate ‘best-compromise’ solutions which come closest to an ideal point defined in terms of risk minimisation. This approach can be regarded as the compromise-risk programming model. The purpose here is to show how this ‘hybridisation’ of Markowitz/MOTAD and compromise programming approaches overcomes some of the weaknesses of the traditional approach to handling risk in resource allocation models. |
