Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Chapter 14.2, Problem 9P
Summary Introduction
To calculate: The accuracy measures and create the ROC curve.
Introduction: Simulation model is the digital prototype of the physical model that helps to
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Hi is this correct?The management of an oil company is trying to decide whether to drill for oil in a particular fieldin the Gulf of Mexico. It costs the company $600 thousand to drill in the selected field. Themanagement believes that if oil is found in this field, its estimated value will be $3400 thousand. Atpresent, this oil company believes that there is a 45% chance that the selected field actually containsoil. Before drilling, the oil company can hire a team of geologists to perform seismographic tests at acost of $55 thousand. Based on similar tests in other fields, the tests have a 25% false negative rate(no oil predicted when oil is present) and a 15% false positive rate (oil predicted when no oil ispresent).A. Assume the oil company wants to maximize its expected net earnings. Please utilize decisiontree analysis to determine its optimal strategy.B. Calculate the expected value of the information (EVI/EVSI) provided by the team ofgeologists.C. Calculate and interpret EVPI…
A company that supplies gasoline to a city has recorded the weeklyusage (tons/week) for the past 3 years. The file BA3653GasolineRecord.xlsxcontains this record.
(c) In general, the company delivers the demanded gasoline to customersthat store it in their own facilities. However, the company would like toobtain its own storage tanks to better handle variability. The companyhas identified several solutions: a 500 ton, a 1000 ton, a 2000 ton and a3000 ton system, with each tank being proportionately more expensiveas its size grows. Given your predictions and the expected variability,what size of tank would you choose?(d) Reaching the city is sometimes hazardous due to weather conditions.Even with these challenges, the company estimates that the most thatshipments to the city may be delayed is 1 week. Given this information,which tank choice (of those in part c) do you think would be appropriate?
week
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1
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2
1316.2
3
1197
4
1127.3
5
1193.1
6
1260.7
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In the original OJ Simpson trial, it was accepted that OJ had battered his wife. OJ’s lawyer tried to negate the impact of this information by stating that in a one-year period, only 1 out of 2500 battered women are murdered, so the fact that OJ battered his wife does not give much evidence that he was the murderer. The prosecution (foolishly!) let this go unchallenged. Here are the relevant statistics: In a typical year 6.25 million women are battered, 2500 are battered and murdered, and 2250 of the women who were battered and murdered were killed by the batterer. How should the prosecution have refuted the defense’s argument?
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