Consider an economy with three types of jobs. The table below shows the jobs, the frequency with which vacancies open up on a yearly basis, and the income associated with each job. Searching for a job costs $ C per year and generates at most one job offer. There is a 20 percent chance of not receiving an offer in a year. (Note: The expected search duration for a job with probability p of appearing is 1/ p year.) Job Type Frequency Income A 30 percent $ 60,000 B 20 percent $100,000 C 30 percent $ 80,000 As a function of C, specify the optimal job search strategy if the worker maximizes her expected income net of search costs.
Q: You need to combine the two events with the most overlap in topic but you cannot exceed 15 attendees…
A: To find the best combination of two events with the most overlap in topic while ensuring the…
Q: 1. Clearly identify and justify one (1) type of alliance from the scenario, that Tech Products Inc.…
A: Tech Products Inc., a leading technology company renowned for its innovative products, faces…
Q: Fuel Up Restaurant is nestled near the bustling library of Westford University, "Fuel Up" isn't your…
A: Businesses utilise demand forecasting systems as a tool or procedure to estimate future demand for…
Q: Discuss. In what ways does technological innovation impact the division of labor within contemporary…
A: The division of labor involves breaking down production activities into smaller jobs that can be…
Q: How does Talent Relationship Management contribute to succession planning and internal talent…
A: Talent Relationship Management( TRM) refers to the strategic process of structure and maintaining…
Q: What are the consequences of micromanagement in managerial roles?
A: Managerial roles refer to the behaviors employed to carry out various management duties such as…
Q: Based on your readings and experiences define the term conflict in the workplace and discuss…
A: Conflict management is based on the process of controlling, recognizing, and resolving clashes,…
Q: Question 1. Narrow the focus of each of the following broad topics so that they each signal the use…
A: The objective of the question is to narrow down the broad topics using the Analysis by Division…
Q: Enumerate, how has globalization influenced the evolution of management?
A: Globalization refers to the ongoing process of increasing interconnectedness and interdependence…
Q: In light of demographic shifts and generational differences in workforce expectations, how do…
A: Human resource management is the aspect of management that deals with all the functions and…
Q: How does technological innovation influence the division of labor in modern workplaces?
A: Organizational Behavior (OB) is the investigation of how people, gatherings, and designs inside an…
Q: Discuss. How can organizations create a safe space for employees to give and receive feedback…
A: Employee feedback refers to constructive criticism, opinions, and evaluations of the work, behavior,…
Q: Case Study on Downsizing StrategyBackground Eastman Kodak, often simply referred to as Kodak, was a…
A: Question 1: Implementing and Managing Organizational ChangeTaking and executing the change…
Q: Corporate governance is a critical aspect of management that encompasses the systems, processes, and…
A: Corporate governance refers to the framework of rules, practices, and processes by which a company…
Q: Innovation is the engine that drives progress and propels organizations forward in today's dynamic…
A: Fostering a culture of innovation within an organization is essential for driving progress and…
Q: w hat strategies can managers use to handle stress and pressure in their roles?
A: Stress management involves adopting strategies and techniques to cope with and reduce the negative…
Q: Define 5 procedures an auditor should perform to collect relevant information for his or her…
A: In the dynamic field of auditing, a critical aspect of ensuring audit quality and mitigating risks…
Q: Mangement Effective management is crucial for the success of any organization. It involves…
A: Effective management refers to the process of coordinating and overseeing coffers, tasks, and…
Q: Enumerate, What are the long-term benefits of investing in employee well-being for organizations and…
A: Employee well-being is a critical component of a successful workplace and business. Businesses that…
Q: You have just been appointed to head up the committee to plan the upcoming holiday party for your…
A: The task involves creating an email draft to invite committee members (Susan, Mark, John, and Kathy)…
Q: What do you think can be done to improve the situation in the common Amazon SWP (strategic workforce…
A: Improving the situation in the Amazon SWP (Supply Chain Workers Program) is a multifaceted challenge…
Q: In today's fast-paced work environments, stress management has become increasingly important for…
A: Stress management refers to the set of ways, strategies, and practices aimed at feting ,…
Q: w hat are the potential consequences of ineffective performance appraisal systems for organizations?
A: Performance management is a methodical cycle that includes arranging, observing, assessing, and…
Q: How does strategic direction influence partnerships and alliances with other organizations?
A: strategic direction provides the comprehensive blueprint that organizational architecture and…
Q: Detail the procedural steps involved in instituting a motivational initiative within an…
A: Organizational management is the way of managing, coordinating, and planning the resources of a…
Q: enumerate.. the advantages of on-the-job training compared to other training methods.
A: In the employee development, various training methods play a crucial role in shaping competent and…
Q: What are the success factors and challenges in Disaster Risk Management in Botswana?
A: Disaster Risk Management (DRM) is a crucial aspect of sustainable development, aiming to reduce the…
Q: SK - Purchases for week 36 Suppler Address Bristol Street Motors PLC Evans Electric Motors Ltd. Mizu…
A: In scrutinizing this week's purchases for our powered skateboard company, we delve into the…
Q: What are the 3 principles of the Belmont Report for conducting research and how could interview…
A: In the realm of research ethics, the Belmont Report stands as a cornerstone, delineating key…
Q: As public awareness of the need to recycle, reuse and repair has grown, TerraCycle has found that…
A: As environmental consciousness grows and recycling becomes more integrated into our lives,…
Q: Strategic management is the process of formulating and implementing strategies to achieve…
A: Strategic management is a dynamic process essential for organizations navigating today's…
Q: Workplace diversity and inclusion have become increasingly important topics in modern management.…
A: In an organizational context, the spectrum of workforce diversity extends to a myriad of individuals…
Q: From the research topic below, kindly prepare a journal entry sharing your reflection on your…
A: The objective of this question is to reflect on the experience of analyzing primary data collected…
Q: Prepare a brief report on how the methods may change to match the differing objectives of two…
A: In the realm of marketing and advocacy, campaigns are designed to achieve specific objectives, which…
Q: Provide a discussion on the need analysis conducted before administering a training and development…
A: An essential first stage in the training and development process is needs analysis, which aids in…
Q: di scuss. what is the importance of planning for work activities in achieving organizational goals?
A: Planning is an intrinsic procedure entailing the formulation of objectives, identification of…
Q: Discuss the impact of remote work and virtual teams on workplace dynamics.
A: The word "workplace dynamics" refers to how employees communicate, collaborate, and work together.…
Q: Investigate.. what are the benefits of job rotation programs for skill development of employees?
A: Job rotation is a strategic human resource management practice wherein employees are systematically…
Q: Kindly draft a letter to the Permanent Secretary, MCWL&E, to request urgent action to be taken on…
A: The property situated in Barzey has recently suffered extensive water damages, primarily due to the…
Q: briefly enumerate w hat are the common drivers of organizational change?
A: Modifying an organization's structure in a significant way is known as organizational change.…
Q: enumerate . . h ow can organizations address unethical behavior among employees?
A: Actions taken at work that violate the prevailing moral norms in the community are referred to as…
Q: How do performance management systems influence workplace dynamics
A: Workplace dynamics refers to interpersonal interactions, personal relationships, and behaviors that…
Q: in the context of strategic management explain , the role that strategic leadership play in driving…
A: Strategic management is a critical aspect of any organization's success and growth. It involves the…
Q: In a nuanced examination, delineate how organizational norms shape employee retention and turnover…
A: In the dynamic landscape of organizational behavior, the intricate interplay between internal norms…
Q: Mangement Effective leadership is essential for driving organizational success, inspiring teams,…
A: Effective leadership refers to the capability of an individual or a group to inspire, motivate, and…
Q: What are some common indicators of high employee morale within an organization?
A: Particularly, workplace morale is the focus of employee morale. It is described as the general level…
Q: discuss, What strategies can managers use to handle stress and pressure in their roles?
A: A management position in an organization entails oversight and accountability. Depending on their…
Q: Leadership is a critical aspect of management, focusing on inspiring and guiding individuals or…
A: Leadership is the process of impacting and guiding individualities or groups toward the…
Q: How does management planning contribute to organizational goal achievement?
A: Planning for management involves giving considerable thought to the best ways to effectively guide a…
Q: What are some reasons why raters should receive training to understand the evaluation system and its…
A: The objective of the question is to understand the importance of training raters in the context of…
Consider an economy with three types of jobs. The table below shows the jobs, the frequency with which vacancies open up on a yearly basis, and the income associated with each job. Searching for a
Job Type Frequency Income
A 30 percent $ 60,000
B 20 percent $100,000
C 30 percent $ 80,000
As a function of C, specify the optimal job search strategy if the worker maximizes her expected income net of search costs.
Step by step
Solved in 3 steps with 10 images
- 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.Based on Babich (1992). Suppose that each week each of 300 families buys a gallon of orange juice from company A, B, or C. Let pA denote the probability that a gallon produced by company A is of unsatisfactory quality, and define pB and pC similarly for companies B and C. If the last gallon of juice purchased by a family is satisfactory, the next week they will purchase a gallon of juice from the same company. If the last gallon of juice purchased by a family is not satisfactory, the family will purchase a gallon from a competitor. Consider a week in which A families have purchased juice A, B families have purchased juice B, and C families have purchased juice C. Assume that families that switch brands during a period are allocated to the remaining brands in a manner that is proportional to the current market shares of the other brands. For example, if a customer switches from brand A, there is probability B/(B + C) that he will switch to brand B and probability C/(B + C) that he will switch to brand C. Suppose that the market is currently divided equally: 10,000 families for each of the three brands. a. After a year, what will the market share for each firm be? Assume pA = 0.10, pB = 0.15, and pC = 0.20. (Hint: You will need to use the RISKBINOMLAL function to see how many people switch from A and then use the RISKBENOMIAL function again to see how many switch from A to B and from A to C. However, if your model requires more RISKBINOMIAL functions than the number allowed in the academic version of @RISK, remember that you can instead use the BENOM.INV (or the old CRITBENOM) function to generate binomially distributed random numbers. This takes the form =BINOM.INV (ntrials, psuccess, RAND()).) b. Suppose a 1% increase in market share is worth 10,000 per week to company A. Company A believes that for a cost of 1 million per year it can cut the percentage of unsatisfactory juice cartons in half. Is this worthwhile? (Use the same values of pA, pB, and pC as in part a.)An automobile manufacturer is considering whether to introduce a new model called the Racer. The profitability of the Racer depends on the following factors: The fixed cost of developing the Racer is triangularly distributed with parameters 3, 4, and 5, all in billions. Year 1 sales are normally distributed with mean 200,000 and standard deviation 50,000. Year 2 sales are normally distributed with mean equal to actual year 1 sales and standard deviation 50,000. Year 3 sales are normally distributed with mean equal to actual year 2 sales and standard deviation 50,000. The selling price in year 1 is 25,000. The year 2 selling price will be 1.05[year 1 price + 50 (% diff1)] where % diff1 is the number of percentage points by which actual year 1 sales differ from expected year 1 sales. The 1.05 factor accounts for inflation. For example, if the year 1 sales figure is 180,000, which is 10 percentage points below the expected year 1 sales, then the year 2 price will be 1.05[25,000 + 50( 10)] = 25,725. Similarly, the year 3 price will be 1.05[year 2 price + 50(% diff2)] where % diff2 is the percentage by which actual year 2 sales differ from expected year 2 sales. The variable cost in year 1 is triangularly distributed with parameters 10,000, 12,000, and 15,000, and it is assumed to increase by 5% each year. Your goal is to estimate the NPV of the new car during its first three years. Assume that the company is able to produce exactly as many cars as it can sell. Also, assume that cash flows are discounted at 10%. Simulate 1000 trials to estimate the mean and standard deviation of the NPV for the first three years of sales. Also, determine an interval such that you are 95% certain that the NPV of the Racer during its first three years of operation will be within this interval.
- W. L. Brown, a direct marketer of womens clothing, must determine how many telephone operators to schedule during each part of the day. W. L. Brown estimates that the number of phone calls received each hour of a typical eight-hour shift can be described by the probability distribution in the file P10_33.xlsx. Each operator can handle 15 calls per hour and costs the company 20 per hour. Each phone call that is not handled is assumed to cost the company 6 in lost profit. Considering the options of employing 6, 8, 10, 12, 14, or 16 operators, use simulation to determine the number of operators that minimizes the expected hourly cost (labor costs plus lost profits).In August of the current year, a car dealer is trying to determine how many cars of the next model year to order. Each car ordered in August costs 20,000. The demand for the dealers next year models has the probability distribution shown in the file P10_12.xlsx. Each car sells for 25,000. If demand for next years cars exceeds the number of cars ordered in August, the dealer must reorder at a cost of 22,000 per car. Excess cars can be disposed of at 17,000 per car. Use simulation to determine how many cars to order in August. For your optimal order quantity, find a 95% confidence interval for the expected profit.Based on Grossman and Hart (1983). A salesperson for Fuller Brush has three options: (1) quit, (2) put forth a low level of effort, or (3) put forth a high level of effort. Suppose for simplicity that each salesperson will sell 0, 5000, or 50,000 worth of brushes. The probability of each sales amount depends on the effort level as described in the file P07_71.xlsx. If a salesperson is paid w dollars, he or she regards this as a benefit of w1/2 units. In addition, low effort costs the salesperson 0 benefit units, whereas high effort costs 50 benefit units. If a salesperson were to quit Fuller and work elsewhere, he or she could earn a benefit of 20 units. Fuller wants all salespeople to put forth a high level of effort. The question is how to minimize the cost of encouraging them to do so. The company cannot observe the level of effort put forth by a salesperson, but it can observe the size of his or her sales. Thus, the wage paid to the salesperson is completely determined by the size of the sale. This means that Fuller must determine w0, the wage paid for sales of 0; w5000, the wage paid for sales of 5000; and w50,000, the wage paid for sales of 50,000. These wages must be set so that the salespeople value the expected benefit from high effort more than quitting and more than low effort. Determine how to minimize the expected cost of ensuring that all salespeople put forth high effort. (This problem is an example of agency theory.)
- A European put option allows an investor to sell a share of stock at the exercise price on the exercise data. For example, if the exercise price is 48, and the stock price is 45 on the exercise date, the investor can sell the stock for 48 and then immediately buy it back (that is, cover his position) for 45, making 3 profit. But if the stock price on the exercise date is greater than the exercise price, the option is worthless at that date. So for a put, the investor is hoping that the price of the stock decreases. Using the same parameters as in Example 11.7, find a fair price for a European put option. (Note: As discussed in the text, an actual put option is usually for 100 shares.)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.)Suppose you currently have a portfolio of three stocks, A, B, and C. You own 500 shares of A, 300 of B, and 1000 of C. The current share prices are 42.76, 81.33, and, 58.22, respectively. You plan to hold this portfolio for at least a year. During the coming year, economists have predicted that the national economy will be awful, stable, or great with probabilities 0.2, 0.5, and 0.3. Given the state of the economy, the returns (one-year percentage changes) of the three stocks are independent and normally distributed. However, the means and standard deviations of these returns depend on the state of the economy, as indicated in the file P11_23.xlsx. a. Use @RISK to simulate the value of the portfolio and the portfolio return in the next year. How likely is it that you will have a negative return? How likely is it that you will have a return of at least 25%? b. Suppose you had a crystal ball where you could predict the state of the economy with certainty. The stock returns would still be uncertain, but you would know whether your means and standard deviations come from row 6, 7, or 8 of the P11_23.xlsx file. If you learn, with certainty, that the economy is going to be great in the next year, run the appropriate simulation to answer the same questions as in part a. Repeat this if you learn that the economy is going to be awful. How do these results compare with those in part a?
- Play Things is developing a new Lady Gaga doll. The company has made the following assumptions: The doll will sell for a random number of years from 1 to 10. Each of these 10 possibilities is equally likely. At the beginning of year 1, the potential market for the doll is two million. The potential market grows by an average of 4% per year. The company is 95% sure that the growth in the potential market during any year will be between 2.5% and 5.5%. It uses a normal distribution to model this. The company believes its share of the potential market during year 1 will be at worst 30%, most likely 50%, and at best 60%. It uses a triangular distribution to model this. The variable cost of producing a doll during year 1 has a triangular distribution with parameters 15, 17, and 20. The current selling price is 45. Each year, the variable cost of producing the doll will increase by an amount that is triangularly distributed with parameters 2.5%, 3%, and 3.5%. You can assume that once this change is generated, it will be the same for each year. You can also assume that the company will change its selling price by the same percentage each year. The fixed cost of developing the doll (which is incurred right away, at time 0) has a triangular distribution with parameters 5 million, 7.5 million, and 12 million. Right now there is one competitor in the market. During each year that begins with four or fewer competitors, there is a 25% chance that a new competitor will enter the market. Year t sales (for t 1) are determined as follows. Suppose that at the end of year t 1, n competitors are present (including Play Things). Then during year t, a fraction 0.9 0.1n of the company's loyal customers (last year's purchasers) will buy a doll from Play Things this year, and a fraction 0.2 0.04n of customers currently in the market ho did not purchase a doll last year will purchase a doll from Play Things this year. Adding these two provides the mean sales for this year. Then the actual sales this year is normally distributed with this mean and standard deviation equal to 7.5% of the mean. a. Use @RISK to estimate the expected NPV of this project. b. Use the percentiles in @ RISKs output to find an interval such that you are 95% certain that the companys actual NPV will be within this interval.You are considering a 10-year investment project. At present, the expected cash flow each year is 10,000. Suppose, however, that each years cash flow is normally distributed with mean equal to last years actual cash flow and standard deviation 1000. For example, suppose that the actual cash flow in year 1 is 12,000. Then year 2 cash flow is normal with mean 12,000 and standard deviation 1000. Also, at the end of year 1, your best guess is that each later years expected cash flow will be 12,000. a. Estimate the mean and standard deviation of the NPV of this project. Assume that cash flows are discounted at a rate of 10% per year. b. Now assume that the project has an abandonment option. At the end of each year you can abandon the project for the value given in the file P11_60.xlsx. For example, suppose that year 1 cash flow is 4000. Then at the end of year 1, you expect cash flow for each remaining year to be 4000. This has an NPV of less than 62,000, so you should abandon the project and collect 62,000 at the end of year 1. Estimate the mean and standard deviation of the project with the abandonment option. How much would you pay for the abandonment option? (Hint: You can abandon a project at most once. So in year 5, for example, you abandon only if the sum of future expected NPVs is less than the year 5 abandonment value and the project has not yet been abandoned. Also, once you abandon the project, the actual cash flows for future years are zero. So in this case the future cash flows after abandonment should be zero in your model.)It is surprising (but true) that if 23 people are in the same room, there is about a 50% chance that at least two people will have the same birthday. Suppose you want to estimate the probability that if 30 people are in the same room, at least two of them will have the same birthday. You can proceed as follows. a. Generate random birthdays for 30 different people. Ignoring the possibility of a leap year, each person has a 1/365 chance of having a given birthday (label the days of the year 1 to 365). You can use the RANDBETWEEN function to generate birthdays. b. Once you have generated 30 peoples birthdays, how can you tell whether at least two people have the same birthday? One way is to use Excels RANK function. (You can learn how to use this function in Excels online help.) This function returns the rank of a number relative to a given group of numbers. In the case of a tie, two numbers are given the same rank. For example, if the set of numbers is 4, 3, 2, 5, the RANK function returns 2, 3, 4, 1. (By default, RANK gives 1 to the largest number.) If the set of numbers is 4, 3, 2, 4, the RANK function returns 1, 3, 4, 1. c. After using the RANK function, you should be able to determine whether at least two of the 30 people have the same birthday. What is the (estimated) probability that this occurs?