Questions from Management Science

Q: In the Walton Bookstore example with a discrete demand distribution, explain

In the Walton Bookstore example with a discrete demand distribution, explain why an order quantity other than one of the possible demands cannot maximize the expected profit.

Q: If you add several normally distributed random numbers, the result is

If you add several normally distributed random numbers, the result is normally distributed, where the mean of the sum is the sum of the individual means, and the variance of the sum is the sum of the...

Q: We stated that the damage amount is normally distributed. Suppose instead

We stated that the damage amount is normally distributed. Suppose instead that the damage amount is triangularly distributed with parameters 500, 1500, and 7000. That is, the damage in an accident can...

Q: Continuing the previous problem, assume, as in Problem 11,

Continuing the previous problem, assume, as in Problem 11, that the damage amount is normally distributed with mean $3000 and standard deviation $750. Run @RISK with 5000 iterations to simulate the am...

Q: In Problem 12 of the previous section, suppose that the demand

In Problem 12 of the previous section, suppose that the demand for cars is normally distributed with mean 100 and standard deviation 15. Use @RISK to determine the “best” order quantity—in this case,...

Q: Use Excel’s functions (not @RISK) to generate 1000 random

Use Excel’s functions (not @RISK) to generate 1000 random numbers from a normal distribution with mean 100 and standard deviation 10. Then freeze these random numbers. a. Calculate the mean and standa...

Q: Use @RISK to analyze the sweatshirt situation in Problem 14 of

Use @RISK to analyze the sweatshirt situation in Problem 14 of the previous section. Do this for the discrete distributions given in the problem. Then do it for normal distributions. For the normal ca...

Q: Although the normal distribution is a reasonable input distribution in many situations

Although the normal distribution is a reasonable input distribution in many situations, it does have two potential drawbacks: (1) it allows negative values, even though they may be extremely improbabl...

Q: The Fizzy Company produces six-packs of soda cans. Each

The Fizzy Company produces six-packs of soda cans. Each can is supposed to contain at least 12 ounces of soda. If the total weight in a six-pack is less than 72 ounces, Fizzy is fined $100 and receive...

Q: When you use @RISK’s correlation feature to generate correlated random numbers

When you use @RISK’s correlation feature to generate correlated random numbers, how can you verify that they are correlated? Try the following. Use the RISKCORRMAT function to generate two normally di...