Questions from Management Science

Q: You plan to simulate a portfolio of investments over a multiyear period

You plan to simulate a portfolio of investments over a multiyear period, so for each investment (which could be a particular stock or bond, for example), you need to simulate the change in its value f...

Q: Use @RISK to draw a triangular distribution with parameters 300,

Use @RISK to draw a triangular distribution with parameters 300, 500, and 900. Then answer the following questions. a. What are the mean and standard deviation of this distribution? b. What are the 5t...

Q: Big Hit Video must determine how many copies of a new video

Big Hit Video must determine how many copies of a new video to purchase. Assume that the company’s goal is to purchase a number of copies that maximizes its expected profit from the video during the n...

Q: Modify the Pigskin spreadsheet model so that except for month 6,

Modify the Pigskin spreadsheet model so that except for month 6, demand need not be met on time. The only requirement is that all demand be met eventually by the end of month 6. How does this change t...

Q: Many people who are involved in a small auto accident do not

Many people who are involved in a small auto accident do not file a claim because they are afraid their insurance premiums will be raised. Suppose that City Farm Insurance has three rates. If you file...

Q: A building contains 1000 lightbulbs. Each bulb lasts at most five

A building contains 1000 lightbulbs. Each bulb lasts at most five months. The company maintaining the building is trying to decide whether it is worthwhile to practice a “group replacement” policy. Un...

Q: Why is the RISKCORRMAT function necessary? How does @RISK generate

Why is the RISKCORRMAT function necessary? How does @RISK generate random inputs by default, that is, when RISKCORRMAT is not used?

Q: Consider the claim that normally distributed inputs in a simulation model are

Consider the claim that normally distributed inputs in a simulation model are bound to lead to normally distributed outputs. Do you agree or disagree with this claim? Defend your answer.

Q: It is very possible that when you use a correlation matrix as

It is very possible that when you use a correlation matrix as input to the RISKCORRMAT function in an @RISK model, the program will inform you that this is an invalid correlation matrix. Provide an ex...

Q: When you use a RISKSIMTABLE function for a decision variable, such

When you use a RISKSIMTABLE function for a decision variable, such as the order quantity in the Walton model, explain how this provides a “fair” comparison across the different values tested.