the probability distribution for their product
Q: A warehouse distributor of carpet keeps 6,000 yards of deluxe shag carpet in stock during a month.…
A: Formula:
Q: Classify the following risks into variation, foreseen uncertainty, unforeseen uncertainty, and…
A: The answer is Chaos.
Q: The University of Miami bookstore stocks textbooks in preparation for sales each semester. It…
A: Given: a demanding range of 65-85 is given, as well as the probability associated with each demand…
Q: From past experience, Anna knows that the probability that her friend will take her to dinner in…
A: the probability that her friend will take her to dinner in Orro Resto = 0.7 the probability that…
Q: Suppose that the point spread for a particular sporting event is 10 points and that with this spread…
A: Given, Win Loose Bet $1000 -$1000 Do not bet 0 0
Q: A real estate investor has the opportunity to purchase land currently zoned residential. If the…
A: a) Given, State of nature State of nature Rezoning approved Rezoning not approved…
Q: ABC Ltd. makes cookies which it sells at taka 8 per dozen in special boxes containing one dozen…
A: Given data: Demand (dozens) Probability 0 0.01 1 0.14 2 0.20 3 0.50 4 0.10 5…
Q: (a) An art dealer's client is willing to buy the Sunflower painting at $50,000. The dealer can buy…
A: The question demands to make a decision tree and determine the strategy that will maximize the…
Q: A bakery must decide how many pies to prepare for the upcoming weekend. The bakery has the option to…
A: Given Information; Cost Price of a pie = $ 5 Selling Price of a pie = $ 7 Demand Probability…
Q: How would you go about calculating the likelihood of a "super-event" or a "unique event?" What…
A: Super so one incident occur unexpectedly within a business and have the ability to destabilize the…
Q: The Hoylake Rescue Squad receives an emergency call every 1, 2, 3, 4, 5, or 6 hours, accordingto the…
A: The Hoylake Rescue Squad receives an emergency call every 1, 2, 3, 4, 5, or 6 hours, according to…
Q: A software company recently designed and developed a new service for its customers. However, it…
A: From the above question, a software company recently designed and developed a new service for its…
Q: Daniel Grady is the financial advisor for a number of professional athletes. An analysis of the…
A: The constrains are in Blue The decision variable, the share of investment is in green And the…
Q: The time between arrivals of cars at the Petroco Service Station is defined by the following…
A:
Q: Happy Company is going to introduce one of the three new products (alternative) to the market: A, B…
A: Given Information:
Q: A farmer must decide whether to take protective action to limit damage to his grapefruit crop in the…
A: The farmer decided to take a protective action to limit damage of his grapefruit crop . There are…
Q: Embassy Publishing Company received a six-chapter manuscript for a new college textbook. The editor…
A: This is the answer for question A
Q: A manager is quite concerned about the recent deterioration of a section of the roof on a building…
A: The decision tree is a strong and well-known method for separating and foreseeing. A decision tree…
Q: The Hoylake Rescue Squad receives an emergency call every 1, 2, 3, 4, 5, or 6 hours, accordingto the…
A: Time between probability Cumulative probability 1…
Q: Automobile repair cost continue to rise with the average cost now at $367 per repair. Assume that…
A: Normal distribution with SD = $88 and mean = $367. The z-value at $480 = (480-367)/88 = 0.9004 (left…
Q: The owner of a small business is considering three options: buying a computer, leasing a computer,…
A: Given data; Alternative State #1 (S1) State #2 (S2) State#3 (S3) A1 4 6 5 A2 7 5 1 A3…
Q: A new edition of a very popular textbook will be published a year from now. The publisher currently…
A: Given data, Copies in Hand = 1000 Fixed Cost = $15000 Variable Cost = $20 per book Seeling Price =…
Q: A retailer is deciding how many units of a certain product to stock. The historical probability…
A: In the given question, the probability of selling different units is given. The data is as follows.…
Q: A large apparel company wants to determine the profitability of one of its most popular products, a…
A: Estimated sales in region 1 Units Probability Expected value= units * probability…
Q: Explain the factors to be considered to come up with probability of super event or unique event
A: Consider the following when calculating the likelihood of a super-event or a unique event:
Q: The Polo Development Firm is building a shopping center. It has informed renters that their rental…
A: Probability is a statistical tool but in operations, the probability is used to check the favourable…
Q: Planetary Communications, Inc., intends to launch a satellite that will enhance reception of…
A:
Q: A manufacturing plant has reached full capacity. The company must build a second plant—eithersmall…
A: The expected payoff is a genuinely determined file that addresses the normal benefit/misfortune…
Q: A manager is quite concerned about the recent deterioration of a section of the roof on a building…
A: A decision tree is a graphical illustration of all the desirable answers to a decision based on…
Q: A farmer must decide whether to take protective action to limit damage to his grapefruit crop in the…
A: The farmer must decide whether to take protective action to limit damage to his grapefruit crop…
Q: The University of Miami bookstore stocks textbooks in preparation for sales each semester. It…
A: The demand ranges from 70 to 90 units, and the likelihood associated with each demand figure is also…
Q: Planetary Communications, Inc., intends to launch a satellite that will enhance reception of…
A:
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A: Given data: Alternative Scenario Probability Possibleprofit/loss(Impact) Build New Plant ATR…
Q: Construct a decision tree to help the farmer make his decision. What should he do? Explain your…
A: A decision tree is the analysis of the options that are to be considered or chosen among to take the…
Q: The Ramshead Pub sells a large quantity of beer every Saturday. From past sales records, the pub has…
A: Expected number of barrels=60.10+70.20+80.40+90.25+100.05=0.6+1.4+3.2+2.25+0.5=7.95
Q: Embassy Publishing Company received a six-chapter manuscript for a new college textbook. The editor…
A:
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A: Probability = 0.40 Expected profit without suit = $40000 Expected profit with suit =$ 20000…
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A:
Q: A situation in which a decision maker must choose bety possible outcome when the probability of each…
A: When there are the chances of more than one outcome as a result then the decision-maker chooses the…
Q: •A mediçal doctor doing a bypass surgery to his patient is involved in Php 2 million malpractice…
A: The total suit amount is 2 million out of which 1.75 million is the redressal amount and 0.25…
Q: 4. "Family Man," a construction company, is considering whether to bid on a contract for a new…
A: a)
Q: A software company recently designed and developed a new service for its customers. However, it…
A: Decision-making is the process of using various tools and research to make a decision. for making a…
Q: The University of Miami bookstore stocks textbooks in preparation for sales each semester. It…
A: Given- Sales price = $95 Cost price = $70 Cost-refund = $30 Marginal Profit on each book = Sales…
Q: Phillip Witt, president of Witt Input Devices, wishesto create a portfolio of local suppliers for…
A: Given information - Cost of shutdown = $400,000 Super event risk = 3% Unique event risk = 5% Cost of…
Suppose the city introduces a disposal tax and any unsold games must now be
disposed of at a cost of €1 each. What is the company’s expected profit if it
produces 1800 board games?
Step by step
Solved in 2 steps with 2 images
- You now have 10,000, all of which is invested in a sports team. Each year there is a 60% chance that the value of the team will increase by 60% and a 40% chance that the value of the team will decrease by 60%. Estimate the mean and median value of your investment after 50 years. Explain the large difference between the estimated mean and median.A new edition of a very popular textbook will be published a year from now. The publisher currently has 1000 copies on hand and is deciding whether to do another printing before the new edition comes out. The publisher estimates that demand for the book during the next year is governed by the probability distribution in the file P10_31.xlsx. A production run incurs a fixed cost of 15,000 plus a variable cost of 20 per book printed. Books are sold for 190 per book. Any demand that cannot be met incurs a penalty cost of 30 per book, due to loss of goodwill. Up to 1000 of any leftover books can be sold to Barnes and Noble for 45 per book. The publisher is interested in maximizing expected profit. The following print-run sizes are under consideration: 0 (no production run) to 16,000 in increments of 2000. What decision would you recommend? Use simulation with 1000 replications. For your optimal decision, the publisher can be 90% certain that the actual profit associated with remaining sales of the current edition will be between what two values?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.)
- 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.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 a very good NBA team has a 70% chance of winning in each game it plays. During an 82-game season what is the average length of the teams longest winning streak? What is the probability that the team has a winning streak of at least 16 games? Use simulation to answer these questions, where each iteration of the simulation generates the outcomes of all 82 games.
- Software development is an inherently risky and uncertain process. For example, there are many examples of software that couldnt be finished by the scheduled release datebugs still remained and features werent ready. (Many people believe this was the case with Office 2007.) How might you simulate the development of a software product? What random inputs would be required? Which outputs would be of interest? Which measures of the probability distributions of these outputs would be most important?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 have 5 and your opponent has 10. You flip a fair coin and if heads comes up, your opponent pays you 1. If tails comes up, you pay your opponent 1. The game is finished when one player has all the money or after 100 tosses, whichever comes first. Use simulation to estimate the probability that you end up with all the money and the probability that neither of you goes broke in 100 tosses.
- Based on Marcus (1990). The Balboa mutual fund has beaten the Standard and Poors 500 during 11 of the last 13 years. People use this as an argument that you can beat the market. Here is another way to look at it that shows that Balboas beating the market 11 out of 13 times is not unusual. Consider 50 mutual funds, each of which has a 50% chance of beating the market during a given year. Use simulation to estimate the probability that over a 13-year period the best of the 50 mutual funds will beat the market for at least 11 out of 13 years. This probability turns out to exceed 40%, which means that the best mutual fund beating the market 11 out of 13 years is not an unusual occurrence after all.Cliff Colby wants to determine whether his South Japanoil field will yield oil. He has hired geologist Digger Barnesto run tests on the field. If there is oil in the field, there is a95% chance that Digger’s tests will indicate oil. If the fieldcontains no oil, there is a 5% chance that Digger’s tests willindicate oil. If Digger’s tests indicate that there is no oil inthe field, what is the probability that the field contains oil?Before Digger conducts the test, Cliff believes that there isa 10% chance that the field will yield oil.A grow fast company which is found in Addis Ababa is evaluating four alternative single period investment opportunities whose returns are based on the state of the economy. The possible state of the economy and the associated probability distributions are shown in the table below: State Fair Good Great Probability 0.3 0.4 0.3 Besides, the returns for each investment opportunity and each state of the economy are also clearly indicated in the given below table: Alternatives Fair Good Great Alternative 1 $2000 $4000 $7000 Alternative 2 $600 $4600 $6900 Alternative 3 $100 $5100 $8100 Alternative 4 $-4000 $6000 $8500 Based on the information given the above two tables determine:a. Expected monetary value (EMV) of the Grow fast company b. Expected Opportunity Loss (EOL) of the Grow fast company 2 | P a g ec. Expected value of perfect information (EVPI)