Questions from Management Science

Q: One demand function is linear and the other is called a constant

One demand function is linear and the other is called a constant elasticity demand function. Using data tables, show that the price elasticity in the linear demand function is not constant in price, a...

Q: The preceding problem indicates how fewer alternatives can cause total cost to

The preceding problem indicates how fewer alternatives can cause total cost to increase. This problem indicates the opposite. Starting with the solution to the advertising selection problem in Example...

Q: In the solution to the advertising selection model, we indicated that

In the solution to the advertising selection model, we indicated that the women 36 to 55 group is a bottleneck in the sense that the company needs to spend a lot more than it would otherwise have spen...

Q: The advertising response function is only one of several nonlinear functions that

The advertising response function is only one of several nonlinear functions that could be used to get the same “increasing at a decreasing rate” behavior. Another possibility is the function f (n) =...

Q: We implied that each of the five observations was from one period

We implied that each of the five observations was from one period of time, such as a particular week. Suppose instead that each is an average over several weeks. For example, the 4.7 million exposures...

Q: Modify the warehouse location model so that there is an extra customer

Modify the warehouse location model so that there is an extra customer. This customer has 250 shipments per year. Try placing this new customer at various locations. For example, try placing the custo...

Q: Modify the warehouse location model so that customers always travel in horizontal

Modify the warehouse location model so that customers always travel in horizontal or vertical directions. For example, this means that if a customer’s coordinates are (5, 10) and a warehouse is locat...

Q: Use SolverTable in the warehouse location model to see the effect on

Use SolverTable in the warehouse location model to see the effect on the optimal solution of moving one customer farther and farther away from the others. Specifically, let customer 1’s coordinates be...

Q: The IRR is the discount rate r that makes a project have

The IRR is the discount rate r that makes a project have an NPV of $0. You can find IRR in Excel with the built-in IRR function, using the syntax =IRR(range of cash flows). However, it can be tricky....

Q: Modify the warehouse location model as suggested in Modeling Issue 2.

Modify the warehouse location model as suggested in Modeling Issue 2. Specifically, assume that the same four customers have the same annual shipments, but now, there are only two possible warehouse l...