As an Amazon Associate I earn from qualifying purchases.

Efficient Frontier Definition and Explanation PDF | Download eBooks

Learn Efficient Frontier definition in supply chain management with explanation to study “What is Efficient Frontier”. Study efficient frontier explanation with SCM terms to review supply chain management course for online MBA programs.

Efficient Frontier Definition:

  • Convex line which describes current performance trade-us between (usually two) measures of operations performance.

    Operations Management by Nigel Slack, Alistair Brandon-Jones, Robert Johnston



Efficient Frontier Explanation:

The effective wilderness is the arrangement of ideal portfolios that offer the most noteworthy expected return for a characterized degree of hazard or the least chance for a given degree of anticipated return. Portfolios that lie beneath the productive wilderness are imperfect since they don't give enough come back to the degree of hazard. Portfolios that bunch to one side of the proficient boondocks are imperfect since they have a more elevated amount of hazard for the characterized pace of return. The effective outskirts graphically speaks to portfolios that augment returns for the hazard accepted. Profits are reliant for the speculation blends that make up the portfolio. The standard deviation of a security is synonymous with hazard. In a perfect world, a financial specialist looks to populate the portfolio with protections offering extraordinary returns yet whose consolidated standard deviation is lower than the standard deviations of the individual protections. The less synchronized the protections (lower co-change) at that point the lower the standard deviation. In the event that this blend of upgrading the arrival versus hazard worldview is effective, at that point that portfolio should arrange along the proficient wilderness line.

Keep Learning Supply Chain Management Explanations

What is Producers Risk?

Rejection of good product as a bad one by the customers. Sometimes consumers reject the good quality product in future ...

What is Bottleneck?

A bottleneck (or imperative) in a store network implies the asset that requires the longest time in activities of the ...

What is Henderson Clark Model?

The Henderson Clark model is a model that delineates the various circumstances wherein a business may inventive itself or its ...

What is Theory of Constraints (TOC)?

The net present esteem is the total of present estimations of cash in various future focuses in time. The present ...

What is Division of Labor?

Division of work, the detachment of a work procedure into various assignments, with each undertaking performed by a different individual ...

What is Customization?

As the idea of mass customization successfully defers the errand of separating an item for a particular client until the ...