Q: During the next four months, a customer requires, respectively,
During the next four months, a customer requires, respectively, 600, 800, 1200, and 900 units of a commodity, and no backlogging is allowed (that is, the customer’s requirements must be met on time)....
See AnswerQ: A company is trying to determine the proper capacity level for its
A company is trying to determine the proper capacity level for its new electric car. A unit of capacity provides the potential to produce one car per year. It costs $15,000 to build a unit of capacity...
See AnswerQ: The DC Cisco office is trying to predict the revenue it will
The DC Cisco office is trying to predict the revenue it will generate next week. Ten deals may close next week. The probability of each deal closing and data on the possible size of each deal (in mill...
See AnswerQ: A common decision is whether a company should buy equipment and produce
A common decision is whether a company should buy equipment and produce a product in house or outsource production to another company. If sales volume is high enough, then by producing in house, the s...
See AnswerQ: Consider an oil company that bids for the rights to drill in
Consider an oil company that bids for the rights to drill in offshore areas. The value of the right to drill in a given offshore area is highly uncertain, as are the bids of the competitors. This prob...
See AnswerQ: Suppose you begin year 1 with $5000. At the beginning
Suppose you begin year 1 with $5000. At the beginning of each year, you put half of your money under a mattress and invest the other half in Whitewater stock. During each year, there is a 40% chance t...
See AnswerQ: Mary Higgins is a freelance writer with enough spare time on her
Mary Higgins is a freelance writer with enough spare time on her hands to play the stock market fairly seriously. Each morning she observes the change in stock price of a particular stock and decides...
See AnswerQ: We commented on the 95th percentile on days required and the corresponding
We commented on the 95th percentile on days required and the corresponding date to start production. If the company begins production on this date, then it is 95% sure to complete the order by the due...
See AnswerQ: You are considering a 10-year investment project. At present
You are considering a 10-year investment project. At present, the expected cash flow each year is $10,000. Suppose, however, that each year’s cash flow is normally distributed with mean equal to last...
See AnswerQ: Play Things is developing a new Lady Gaga doll. The company
Play Things is developing a new Lady Gaga doll. The company has made the following assumptions: ■ The doll will sell for a random number of years from 1 to 10. Each of these 10 possibilities is equall...
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