EBK OPERATIONS MANAGEMENT
11th Edition
ISBN: 8220103630726
Author: RENDER
Publisher: PEARSON
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Textbook Question
Chapter A, Problem 24P
Question
•••• A.24 On the opening page of Module A and in Example A8, we follow the poker decision made by Paul Phillips against veteran T.J. Cloutier. Create a decision tree that corresponds with the decision made by Phillips.
At the Legends of Poker tournament in Los Angeles, veteran T.J. Cloutier opens with a $60,000 bet. (Antes and required bets of $39,000 are already on the table.) Former Go2net CTO Paul Phillips ponders going “all in”—betting virtually all his chips. Using decision theory, here’s how he decided.
“To see the details of Phillips’s decision, see Example A8.
As on the first page in this module, Paul Phillips is deciding whether to bet all his chips against poker star T.J. Cloutier. Philips holds a pair of 7s. Phillips reasons that T.J. will fold (with 80% probability) if he does not have a pair of 5s or better, or very high cards like a jack, queen, king, or ace. But he also figures that a call would put $853,000 into the pot and surmises that even then, there is 45% chance his pair of 7s will win.
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D&R A3
1-1
Question 1. Plain Vanilla Interest Rate Swap
Incredible Inc., a manufacturer of children’s toys, enters into a two-year plain vanilla interest rate swap, in which the corporation will receive a fixed rate and pay a floating rate of LIBOR. The notional amount on this swap is $75 million. Swap payments will be netted every 180 days, and the LIBOR requires the assumption of a 360-day year. The term structure of LIBOR on the swap initiation date is as follows:
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180
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360
3.55
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720
3.70
What is the fixed rate determined on the swap initiation date?
QUESTION 2
a)
b)
Ferrero Candy Company makes three types of candy, which are solid, fruit and cream-
filled and packages these candies in three assortments. A box of assortment I contains
4 solids, 4 fruits and 12 creams. While, a box of assortment II contains 12 solids, 4
fruits and 4 creams. Lastly, a box of assortment III contains 8 solids, 8 fruits and 8
creams. The company can manufacture up to 4800 solids, 4000 fruits and 5600 cream
candies weekly. The profit each box of assortment I, II and III are RM4, RM3 and
RM5 respectively. The company wishes to maximize its profit.
Formulate the problem as a linear programming model.
A manufacturing company produces three types of products (R, S and T). The following
is an incomplete final simplex tableau for a linear programming maximization problem.
X₁, X₂ and X3 represents the units of products R, S and T, respectively. S₁, S2 and S3
are the slack variables for Resources 1, 2 and 3, respectively.
i.
ii.
A
5
4
Basic
X₂
X3
X₁
Zj
Cj-Zj
X₁…
Question
A local real estate investor in Kingston is considering three investments: a motel, a restaurant, or a theatre. Profits from the motel or restaurant will be affected by the availability of gasoline and the number of tourist; Profits from the theatre will be relatively stable under any conditions. The following payoff table shows the profit or loss that could result from each investment:
Real Estate Investor Payoff Table
Payoffs are Profits
States of Nature (Gasoline Avaliability)
Decision Alternatives
Shortage
Stable Supply
Surplus
Motel
$8,000
$15,000
$22,000
Restaurant
$2,000
$8000
$6,000
Theater
$6,000
$6,000
$5,000
Which option should the real estate investor choose if he uses the Equal Likelihood criterion?
Using a maximax approach, what alternative should the real estate investor choose?
Using the Maximum approach, what alternative should the real estate investor choose?
Chapter A Solutions
EBK OPERATIONS MANAGEMENT
Ch. A - Prob. 1DQCh. A - Prob. 2DQCh. A - Prob. 3DQCh. A - Prob. 4DQCh. A - Prob. 5DQCh. A - Question: 6. Explain how decision trees might be...Ch. A - Prob. 7DQCh. A - Prob. 8DQCh. A - Question 9. Identify the five steps in analyzing a...Ch. A - Prob. 10DQ
Ch. A - Question 11. The expected value criterion is...Ch. A - Question 12. When are decision trees most useful?Ch. A - Given the following conditional value table,...Ch. A - Prob. 2PCh. A - Prob. 3PCh. A - Jeffrey Helm owns a health and fitness center...Ch. A - Prob. 5PCh. A - Prob. 6PCh. A - Prob. 7PCh. A - Prob. 8PCh. A - Prob. 9PCh. A - Prob. 10PCh. A - The University of Miami bookstore stocks textbooks...Ch. A - Palmer Jam Company is a small manufacturer of...Ch. A - Prob. 13PCh. A - Prob. 14PCh. A - Prob. 15PCh. A - Prob. 16PCh. A - Prob. 17PCh. A - Prob. 18PCh. A - Prob. 19PCh. A - Philip Musa can build either a large video rental...Ch. A - Prob. 21PCh. A - Prob. 22PCh. A - Prob. 23PCh. A - Question A.24 On the opening page of Module A and...Ch. A - Question Warehouse Tenting at the Port of Miami...Ch. A - Question Warehouse Tenting at the Port of Miami...Ch. A - Question Warehouse Tenting at the Port of Miami...
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