Questions from Management Science

Q: A Flexible Savings Account (FSA) plan allows you to put

A Flexible Savings Account (FSA) plan allows you to put money into an account at the beginning of the calendar year that can be used for medical expenses. This amount is not subject to federal tax. As...

Q: At the beginning of each week, a machine is in one

At the beginning of each week, a machine is in one of four conditions: 1 = excellent; 2 = good; 3 = average; 4 = bad. The weekly revenue earned by a machine in state 1, 2, 3, or 4 is $100, $90, $50, o...

Q: In one modification of the Pigskin problem, the maximum storage constraint

In one modification of the Pigskin problem, the maximum storage constraint and the holding cost are based on the average inventory (not ending inventory) for a given month, where the average inventory...

Q: Simulation can be used to illustrate a number of results from statistics

Simulation can be used to illustrate a number of results from statistics that are difficult to understand with non-simulation arguments. One is the famous central limit theorem, which says that if you...

Q: In statistics we often use observed data to test a hypothesis about

In statistics we often use observed data to test a hypothesis about a population or populations. The basic method uses the observed data to calculate a test statistic (a single number). If the magnitu...

Q: A technical note in the discussion of @RISK indicated that Latin

A technical note in the discussion of @RISK indicated that Latin Hypercube sampling is more efficient than Monte Carlo sampling. This problem allows you to see what this means. The file P10_44.xlsx ge...

Q: We are continually hearing reports on the nightly news about natural disasters

We are continually hearing reports on the nightly news about natural disasters—droughts in Texas, hurricanes in Florida, floods in California, and so on. We often hear that one of these was the “worst...

Q: You are making several runs of a simulation model, each with

You are making several runs of a simulation model, each with a different value of some decision variable (such as the order quantity in the Walton calendar model), to see which decision value achieves...

Q: If you want to replicate the results of a simulation model with

If you want to replicate the results of a simulation model with Excel functions only, not @RISK, you can build a data table and let the column input cell be any blank cell. Explain why this works.

Q: Suppose you simulate a gambling situation where you place many bets.

Suppose you simulate a gambling situation where you place many bets. On each bet, the distribution of your net winnings (loss if negative) is highly skewed to the left because there are some possibili...