1. Give 2 examples of over processing (waste)? 2 examples of over processing (waste) as follows: 2. What are the limitations of a Simulation model? Mention at least two limitations Limitations of a simulation model|
Q: What does the worst-case scenario simulation model tell you that Monte Carlo simulation does not?…
A: Worst case scenario – It deals with the worst-case scenario. When making a net present value…
Q: Why does this formula not function?
A: THE ANSWER IS AS BELOW:
Q: Which of the following statements about scenario analysis is NOT correct? Scenario analysis can help…
A: The answer is option D . Scenario analysis is an analysis of the the environment in which a business…
Q: Suppose you are an HR (human resources) manager at a big university, and you sense that the…
A: As an HR manager at a big university, it will create a great responsibility to cope up with the…
Q: A hardware company sells a lot of low-cost, highvolumeproducts. For one such product, it is…
A: given, low sales = 60,000 high sales = 100,000 variable cost per unit 25% chance of = $6…
Q: Health care is continually in the news. Can (or should)simulation be used to help solve, or at least…
A: Let’s first understand what are the problems of health care these days and how can we solve them…
Q: What are the 7 steps to performed in simulation to analyze the problem?
A: Simulation is a paradigm that can be used in operations and mimics real-world processes. Random…
Q: Originally, the depositor intended to make two $100 withdrawals, the fırst in 2022 and the second in…
A: SOLUTION: Assume the present year is 2021 PRINCIPLE AMOUNT: P RATE OF INTEREST (R): 5% COMPOUND…
Q: Suppose you are a financial analyst and your company runs many simulation models to estimate the…
A: Simulation modeling: A simulation model is a computerized model that would depict or imitate a…
Q: Eades Corp. has 9% annual coupon bonds that are callable and have 18 years left until maturity. The…
A: The YTM is based on the belief or understanding that an investor purchases the security at the…
Q: 4) There is a seat in the clinic for the patient/person to sit down when he/she is treated. The…
A: THE ANSWER IS AS BELOW:
Q: Explain why Simulation is widely used technique in organzations
A: To be determined : why Simulation is widely used technique in organzations
Q: Which of the following statements is true regarding the advantages of using simulations? a. Its…
A: Option D is correct.
Q: Determine the concept of Monte Carlo simulation and the steps to take after performing Monte Carlo…
A: The theory of random number creation for the production of random variable values is used in the…
Q: Suppose you want to have $800,000 for retirement in 35 years. Your account earns 8% interest. How…
A: Given that : i = 8% annual = 8/12= 0.6667% montly n= 35 years = 35*12 = 420 months Future value, FV…
Q: Explain the steps to be followed in Monte Carlo simulation
A: Monte Carlo simulation makes use of the concept of producing random numbers to generate values for…
Q: What methods are used to analyze time in a simulation model? How do they work?
A: Answer as follows:
Q: A salesperson in a large bicycle shop is paid a bonus ifhe sells more than 4 bicycles a day. The…
A: Our task is to simulate n number of days and find the bonus earned by the salesman each day using…
Q: 5) period. MARR is 10% per year compounded annually. Maintenance costs for a bridge are cyclic with…
A: Present worth of…
Q: a. What is the optimal value of x?
A: A linear equation using to find the optimal value of a problem. Minimizing the C indicating the…
Q: Yearly oil production in Mexico, and yearly oil imports of the US from Mexico can be represented by…
A: Please refer next step for answer
Q: Select the least accurate statement regarding simulation. In a simulation, correlation between two…
A: In insights, connection or reliance is any factual relationship, if causal, between two arbitrary…
Q: iness that where you have frequently observed inefficiencies or lack of capacity. What did you…
A: Government Agencies is of the business where I saw inefficiency and lack of capacity for doing stuff…
Q: As part of their application for a loan to buy Lakeside Farm, a property they hope to develop as a…
A: Breakeven is that point where revenue is equal to cost
Q: Suppose you want to have $700,000 for retirement in 30 years. Your account earns 8% interest. How…
A: Given Amount at time of retirement = $ 700,000 Number of years = 30years Rate =8% Principal amount=?…
Q: If a simulation begins with the first random number, the first simulated value would be: Random…
A: Calculation of cumulative frequencies; Demand Frequency Cumulative frequency 0 0.15 0.15 1…
Q: A stock had annual returns of 3.6 percent, -8.7 percent, 5.6 percent and 12.5 percent over the past…
A: Given that: Year Expected return 1 3.60% 2 -8.70% 3 5.60% 4 12.50%
Q: You are planning to save for retirement over the next 30 years. To do this, you will invest $800 a…
A: Although the stock and bond accounts have different interest rates, we can draw one timeline, but we…
Q: What are the pros and cons of starting a simulation with the system empty? With the system in…
A: Simulation: Simulation is a method of listing and representing the operation of a device in an…
Q: The unit price is 50$. The company produces 50000 units per month. The unit cost follows a…
A: THE ANSWER IS AS BELOW:
Q: Forester and Cohen is a small accounting firm, managed by Joseph Cohen since the retirement in…
A: Aggregate plan refers to the planning to get output using different approaches. Here, the employees…
Q: Rollo Megabux has $1 million to invest in stocks orbonds. The percentage yield on each investment…
A: Given data, Economy Has Good Year Economy Has Bad Year Yield on Stocks 22% 10% Yield on…
Q: Let Z be a standard normal random variable. Estimate via simulation P(Z² < 2)
A: The standard normal distribution is a unique instance of the normal distribution. It is the…
Q: the product its own, the company will require $30 million immediately (n = 0) to build a new…
A: Given - MARR = 20% No. of period= 10 Cash flow in the starting (0) Year = -30 Millions
Q: 53. Why is the RISKCORRMAT function necessary?How does @RISK generate random inputs by default,that…
A: RISKCORMMAT is considered as an function that helps in correlating two or more variables in the…
Q: output variable of interest from a simulation model will be a............ Variable Independent…
A: Random Variable
Q: 85. Health care is continually in the news. Can (or should)simulation be used to help solve, or at…
A: A marketing strategy is a business overall plan for attracting prospective consumers and turning…
Q: See how sensitive the results in Example 11.2 are to the following changes. For each part, make the…
A: The Yakkon Company sells a popular camera for $500 with a warranty of 1.5 years and cost for…
Q: Investment A woman invests $360,000 in three different mutual funds. One averages 12% per year,and…
A: Let, X1 be the investment on the 1st mutual fund X2 be the investment on the 2nd mutual fund X3 be…
Q: Demeter has 100 acres of land on which she can plant wheat or rice. The following table shows the…
A: In the first part of the question, If she plants only wheat then, in case of the dry growing…
Q: A valid reason for using simulation model is: a. analyze relationship between the variables which…
A: Simulation modeling is nothing but the technique of developing and examining automated or digital…
Q: Suppose that a dam was built at a very high cost. At the time of construction, the estimated cost…
A: Assume that a dam was constructed at a very high cost for stop at the time of construction.
Q: 8. "Satisficing" involves finding a solution to a problem that is "good enough," rather than finding…
A: Satisficing refers to providing a product or service that is good enough, rather than doing the best…
Q: 46. You are making several runs of a simulation model,each with a different value of some decision…
A: The decision problem might have more than one dependent variable. On the basis of profit, the…
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- If you want to replicate the results of a simulation model with Excel functions only, not @RISK, you can build a data table and let the column input cell be any blank cell. Explain why this works.Big Hit Video must determine how many copies of a new video to purchase. Assume that the companys goal is to purchase a number of copies that maximizes its expected profit from the video during the next year. Describe how you would use simulation to shed light on this problem. Assume that each time a video is rented, it is rented for one day.A common decision is whether a company should buy equipment and produce a product in house or outsource production to another company. If sales volume is high enough, then by producing in house, the savings on unit costs will cover the fixed cost of the equipment. Suppose a company must make such a decision for a four-year time horizon, given the following data. Use simulation to estimate the probability that producing in house is better than outsourcing. If the company outsources production, it will have to purchase the product from the manufacturer for 25 per unit. This unit cost will remain constant for the next four years. The company will sell the product for 42 per unit. This price will remain constant for the next four years. If the company produces the product in house, it must buy a 500,000 machine that is depreciated on a straight-line basis over four years, and its cost of production will be 9 per unit. This unit cost will remain constant for the next four years. The demand in year 1 has a worst case of 10,000 units, a most likely case of 14,000 units, and a best case of 16,000 units. The average annual growth in demand for years 2-4 has a worst case of 7%, a most likely case of 15%, and a best case of 20%. Whatever this annual growth is, it will be the same in each of the years. The tax rate is 35%. Cash flows are discounted at 8% per year.
- Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If the company builds a plant that can produce x units of Wozac per year, it will cost 16x. Each unit of Wozac is sold for 3. Each unit of Wozac produced incurs a variable production cost of 0.20. It costs 0.40 per year to operate a unit of capacity. Determine how large a Wozac plant the company should build to maximize its expected profit over the next 10 years.The DC Cisco office is trying to predict the revenue it will generate next week. Ten deals may close next week. The probability of each deal closing and data on the possible size of each deal (in millions of dollars) are listed in the file P11_55.xlsx. Use simulation to estimate total revenue. Based on the simulation, the company can be 95% certain that its total revenue will be between what two numbers?Six months before its annual convention, the American Medical Association must determine how many rooms to reserve. At this time, the AMA can reserve rooms at a cost of 150 per room. The AMA believes the number of doctors attending the convention will be normally distributed with a mean of 5000 and a standard deviation of 1000. If the number of people attending the convention exceeds the number of rooms reserved, extra rooms must be reserved at a cost of 250 per room. a. Use simulation with @RISK to determine the number of rooms that should be reserved to minimize the expected cost to the AMA. Try possible values from 4100 to 4900 in increments of 100. b. Redo part a for the case where the number attending has a triangular distribution with minimum value 2000, maximum value 7000, and most likely value 5000. Does this change the substantive results from part a?
- In Example 11.3, if a batch fails to pass inspection, the entire batch is unusable. Change the model so that if a batch fails to pass inspection, it is reworked, and at the end of the rework, its entire yield (the same yield determined in column C) is usable. However, the rework takes 3, 4, or 5 days with respective probabilities 0.2, 0.5, and 0.3. Run the simulation for the modified model and comment on how the results change.Assume that all of a companys job applicants must take a test, and that the scores on this test are normally distributed. The selection ratio is the cutoff point used by the company in its hiring process. For example, a selection ratio of 25% means that the company will accept applicants for jobs who rank in the top 25% of all applicants. If the company chooses a selection ratio of 25%, the average test score of those selected will be 1.27 standard deviations above average. Use simulation to verify this fact, proceeding as follows. a. Show that if the company wants to accept only the top 25% of all applicants, it should accept applicants whose test scores are at least 0.674 standard deviation above average. (No simulation is required here. Just use the appropriate Excel normal function.) b. Now generate 1000 test scores from a normal distribution with mean 0 and standard deviation 1. The average test score of those selected is the average of the scores that are at least 0.674. To determine this, use Excels DAVERAGE function. To do so, put the heading Score in cell A3, generate the 1000 test scores in the range A4:A1003, and name the range A3:A1003 Data. In cells C3 and C4, enter the labels Score and 0.674. (The range C3:C4 is called the criterion range.) Then calculate the average of all applicants who will be hired by entering the formula =DAVERAGE(Data, "Score", C3:C4) in any cell. This average should be close to the theoretical average, 1.27. This formula works as follows. Excel finds all observations in the Data range that satisfy the criterion described in the range C3:C4 (Score0.674). Then it averages the values in the Score column (the second argument of DAVERAGE) corresponding to these entries. See online help for more about Excels database D functions. c. What information would the company need to determine an optimal selection ratio? How could it determine the optimal selection ratio?Simulation can be used to illustrate a number of results from statistics that are difficult to understand with nonsimulation arguments. One is the famous central limit theorem, which says that if you sample enough values from any population distribution and then average these values, the resulting average will be approximately normally distributed. Confirm this by using @ RISK with the following population distributions (run a separate simulation for each): (a) discrete with possible values 1 and 2 and probabilities 0.2 and 0.8; (b) exponential with mean 1 (use the RISKEXPON function with the single argument 1); (c) triangular with minimum, most likely, and maximum values equal to 1,9, and 10. (Note that each of these distributions is very skewed.) Run each simulation with 10 values in each average, and run 1000 iterations to simulate 1000 averages. Create a histogram of the averages to see whether it is indeed bell-shaped. Then repeat, using 30 values in each average. Are the histograms based on 10 values qualitatively different from those, based on 30?
- Rerun the new car simulation from Example 11.4, but now use the RISKSIMTABLE function appropriately to simulate discount rates of 5%, 7.5%, 10%, 12.5%, and 15%. Comment on how the outputs change as the discount rate decreases from the value used in the example, 10%.Suppose you simulate a gambling situation where you place many bets. On each bet, the distribution of your net winnings (loss if negative) is highly skewed to the left because there are some possibilities of really large losses but not much upside potential. Your only simulation output is the average of the results of all the bets. If you run @RISK with many iterations and look at the resulting histogram of this output, what will it look like? Why?Based on Kelly (1956). You currently have 100. Each week you can invest any amount of money you currently have in a risky investment. With probability 0.4, the amount you invest is tripled (e.g., if you invest 100, you increase your asset position by 300), and, with probability 0.6, the amount you invest is lost. Consider the following investment strategies: Each week, invest 10% of your money. Each week, invest 30% of your money. Each week, invest 50% of your money. Use @RISK to simulate 100 weeks of each strategy 1000 times. Which strategy appears to be best in terms of the maximum growth rate? (In general, if you can multiply your investment by M with probability p and lose your investment with probability q = 1 p, you should invest a fraction [p(M 1) q]/(M 1) of your money each week. This strategy maximizes the expected growth rate of your fortune and is known as the Kelly criterion.) (Hint: If an initial wealth of I dollars grows to F dollars in 100 weeks, the weekly growth rate, labeled r, satisfies F = (I + r)100, so that r = (F/I)1/100 1.)