Optimization — the formal process by which decisions are made under conditions of uncertainty.
Components of an optimization risk modeling exercise include a statement of the
range of decision options, a representation of the uncertain conditions
(usually in the form of probability distributions), a statement of constraints
(usually in the form of limitations on the range of decision options), and a
statement of the objective to be maximized (or minimized). An example of an
optimization exercise is an asset allocation study.